Three forces dominated macro research this week: the US-China thaw ahead of the Trump-Xi summit, the Fed's hawkish path, and Middle East energy disruptions.
On US-China, the published consensus frames pre-summit talks on AI, trade, and investment as a near-term risk-on catalyst — particularly for tech and Asian currencies. On the Fed, most analysts converge on markets pricing a better-than-even October hike, with hawkish remarks from Goolsbee, Musalem, Barkin, and Williams reinforcing a higher-for-longer path and lifting the dollar. On energy, a wide body of research points to supply shocks — Strait of Hormuz tensions, Houthi activity, Saudi pipeline damage, and Libya's Sharara outage — as the dominant inflationary force complicating central banks globally.
Not everyone agrees. A contrarian thread of recent research argues the hiking cycle will be shorter and shallower than markets imply. Others push the opposite view if AI-driven demand persists. Some analysts also doubt any durable Iran de-escalation given thin US strategic reserves.
Catalysts to watch: the Trump-Xi summit, Fed speakers, Treasury auctions, flash PMIs, and the RBA meeting.