There are numerous ways to predict economic and market outcomes, each with its own set of pros and cons. One of the more recent arrivals in the realm of trying to divine the future is the rise of prediction markets — platforms where individuals can wager on the outcome of future events and track the estimates in real time. The future’s still uncertain and no one has a crystal ball, but monitoring the estimated probabilities for various macro events offers another source of analytics, if only to compare with the implied probabilities from the usual suspects. On that basis, here’s the first installment for what will be a periodic review of wagers for several economic and financial expectations. The sources for this update: Polymarket and Kalshi. Meanwhile, one thing that hasn’t changed for predictions from any source: Caveat emptor! Note, too, that the predictions shown below reflect a moment in time (earlier today). For the latest updates, click on the links.
Macro Briefing: 9 July 2025
The recent decline in the US economic growth rate below the level of the interest paid on the national debt is a warning sign, writes Jared Bernstein, who was chair of President Biden’s Council of Economic Advisers. “The interest rate our country pays on its debt has increased sharply, driven in part by government spending during the pandemic and by higher inflation. It’s shot up so much that it is now equal to our growth rate. That’s a potential game changer for debt sustainability.”
Rebound Outlook Softens For US Q2 GDP Nowcast
The US economy remains on track to rebound in the second quarter after the modest contraction in Q1, but the expected bounce has downshifted, based on the median estimate for a set of nowcasts compiled by CapitalSpectator.com.
Macro Briefing: 8 July 2025
Trump announced new tariffs set to begin on Aug. 1. Imports from some of America’s biggest trade partners are targeted, including Japan and South Korea, which are set to face 25% tariffs, according to the President’s social media posts on Monday.
Bond Market Will Struggle To Price In Conflicting Risk Factors
The week ahead will provide early clues for two very different risk factors looming for the bond market.
On the one hand, the on-again/off-again risk of tariffs is lurking – a development that could create new economic headwinds that soften growth and, in theory, lower interest rates as investors seek safe havens and the Federal Reserve eases its policy stance to provide stimulus. But tariffs could also lift inflation, perhaps persuading the Fed to keep rates higher for longer if not raise rates. Deciding which aspect of the tariff effect will dominate is tricky for several reasons, including ongoing ambiguity about when or if tariffs will change and uncertainty about the macro price tag associated wiht raising import costs.
Macro Briefing: 7 July 2025
US payrolls rose more than forecast in June, increasing 147,000 for the month. “The solid June jobs report confirms that the labor market remains resolute and slams the door shut on a July rate cut,” said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. For the 1-year trend, payrolls effectively held steady at a 1.15% pace of growth, in line with gains in recent months.
Cue Up The Fireworks!
When in the course of human events this week, it becomes necessary for yours truly to dissolve the usual routine and declare a particular truth to be self-evident: A long July 4 holiday weekend is an unalienable right, and so the Capital Spectator finds it necessary to declare independence from the office until the standard fare resumes on Monday, July 7. Happy Independence Day!
Total Return Forecasts: Major Asset Classes | 02 July 2025
The long-run expected total return for the Global Market Index (GMI) ticked higher for a third straight month in June, rising to an annualized 7.3% from the 7.2% estimate in the previous month. Today’s estimate is moderately below GMI’s realized 10-year performance. The forecast is calculated as the average of three models (defined below) for GMI, an unmanaged global benchmark that’s based on a market-value weighted mix of the major asset classes (excluding cash).
Macro Briefing: 2 July 2025
US job openings rose in May, reaching the highest level since November 2024. The increase surprised economists, who expected openings to decline. Despite the latest upturn, “We suspect underlying demand for new workers continues to recede amid growing signs of consumer spending fatigue,” said Sarah House, a senior economist at Wells Fargo.
Major Asset Classes | June 2025 | Performance Review
Stocks in emerging markets extended their rally in June, posting the strongest gain for the major asset classes last month, based on a set of ETFs. A broad measure of US equities delivered a robust second-place performance amid rallies for all the main categories of global markets for the month.