Mr. 15%: Trump stated if Fed Chair Warsh does his job, US growth could be 15% or higher. It’s unclear if that’s annual, exceeding China’s early spurt, or over the remaining two-and-a-half years of his presidency, so higher than China today, or nominal or real.Yet the key signal for those who called Warsh a ‘hawk’ is that the Fed is going to run the economy hot.That’s as the FT notes, ‘Bash All Day, Buy All Night’, explaining “Why foreigners keep pouring money into America” despite attacking it verbally all the time.

For now, signals are ice cold and red hot. The Wall Street Journal claims ‘Job Hunters Are So Desperate That They’re Paying to Get Recruited.’ However,trucking signals point to a significant upturn ahead led by manufacturing. Already in the 15% camp is AI, where Alphabet is lining up a 100-year sterling bond sale and, as Bloomberg puts it, ‘Memory Chip Squeeze Wreaks Havoc in Markets, With More to Come.’Relatedly, the US is reportedly to exempt Big Tech from upcoming chip tariffs,with exemptions based on FDI commitments from Taiwan’s TSMC.That shows an expected pragmatic refinement of US neo-mercantilism in line with past phases of such political economy.

In the US, AI is now being embraced by many firms in ways which may genuinely boost productivity beyond what old mindsets and models can compute. Yet not all AI is equal. Reuters warns, ‘As AI enters the operating room, reports arise of botched surgeries and misidentified body parts’; Axios adds, ‘People are using AI for legal advice and it's driving lawyers bananas.’So should the idea of mass unemployment in many sector:what good is 15% growth if matched with 15% unemployment?

Old-fashioned oil, and other commodity constraints, will also have something to say about 15% growth.The US military is still surging into the Middle East, as Iran is reportedly ready to “dilute” its highly enriched uranium if all sanctions lifted. Yet with fresh US guidance to ships transiting Strait of Hormuz issued,markets will have to wait and see if this ends like Venezuela or with a deal (bearish oil), or like Iraq (bullish oil).

Mr. 1.5%: In Germany, Bosch is to lay off 20,000 workers as deindustrialisation snowballs, yet German rearmament continues.The latter is boosting GDP growth, but without recovery in other industries (and why assume that?), current trends project a very different German economy ahead- more so if Europe doesn’t make the weapons it rearms with. Yet as the US hands over two key NATO command posts to Europeans,‘France and Germany’s next-generation fighter jet project is ‘dead’’.

On the broader European push to decouple from the US --as it signs up to a US critical minerals plan which implies the complete opposite--the FT reports ‘EU failing to implement economic fixes as single market withers’, and ‘European alternatives to Visa and Mastercard ‘urgently’ needed’; yet Politico claims this week will show ‘Macron sells a vision of ‘Made in Europe’ that Merz and Meloni aren’t buying’, while ‘European industry revolts over EU plan to weaken carbon border tax’ (Politico), which argues the oppositeWhat is the EU grand macro strategy, exactly?

For now, it appears defensive in a different sense. As Politico also notes, ‘Bank of France chief’s surprise exit stokes suspicion among Macron’s opponents’, and the “Governor’s departure allows the French president to future-proof the central bank against a far-right government.”That’s as the Economist underlines that the far right, at 24%, is now the joint largest single faction across European elections.

Equally, whileEurope is considering issuing more Eurobonds to back Euro stablecoins, and ‘has a plan to challenge the dollar’s global role’, “The sticking point is… changing established practices in third countries using dollars... As a next step, the Commission proposes to "obtain a better understanding of the obstacles for the Euro’s wider use, while fully respecting national choices regarding monetary arrangements."Markets will be very happy to explain it to them.

Mr. 1.5%: UK PM Starmer said he’s “not prepared to walk away” after calls for his resignation, but that doesn’t mean he won’t be pushed by his cabinet or the Labour Party.Former Deputy Leader Rayner, under investigation for her tax affairs, briefly had a ‘Rayner for leader’ website up, showing this process is underway.Markets are unhappy about another bout of UK political instability, combined with a possible populist left policy direction ahead.

Mr. 1.5%: In Australia, theRBA just forecasted the worst medium-term economic growth ever – 1.6% annual average through to 2028. Given expected population growth, that’s almost nothing per capita.Even if it’s the Aussie opposition, not government, that’s in turmoil for now, that may not stay the case for long.

Source: ZeroHedge News