The Overshoot

Waking the Sleeping European Giant

Coordination and mobilization of existing resources would transform the continent into a superpower. The ongoing failure to do so is largely the fault…

14 hrs ago • 

Matthew C. Klein

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November 2025

The "Sell America Trade", QT, and Foreign Banks

"Foreign-related institutions" have shed ~$400 billion in dollar deposits at the Fed since July while reducing their overall U.S. exposure. That has…

Nov 18 • 

Matthew C. Klein

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October 2025

Inside America's Consumption Recovery

High earners monetizing asset price gains are always important, but they are far from single-handedly keeping America out of a downturn.

Oct 30 • 

Matthew C. Klein

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The Latest Argentina Bailout will (Probably) Fail

The U.S. Treasury's interventions on behalf of Argentina are unlikely to succeed as long as the country's fiscal probity fails to offset monetary laxity…

Oct 20 • 

Matthew C. Klein

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Guest Post: Dear IMF, It's Not *Only* Fiscal

IMF veteran Christopher Marsh explains how the balance of payments, the domestic financial system, and the fiscal accounts should be linked together…

Oct 10 • 

Chris Marsh

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What Should the U.S. Try to Achieve in Argentina?

Discouraging underconsumption abroad is normally a good use of American financial resources. But still.

Oct 8 • 

Matthew C. Klein

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September 2025

China's "Anti-Involution" Campaign: Global Implications

Slashing excessive investment seems to be easier than ramping up domestic consumption. Net exports, supported by FX management, seem to be making up the…

Sep 19 • 

Matthew C. Klein

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Inflation is Persistent and Consumers are Flush. Falling Rates Could be Dangerous.

Current income is already rising fast enough to finance broad price increases, with borrowing muted thanks to high rates. Lower rates could lead to…

Sep 14 • 

Matthew C. Klein

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U.S. Job Market Still (Surprisingly?) Good. Inflation Risk Is Paramount.

Core measures of labor demand remain strong, while wage growth is holding steady (or re-accelerating). But there are a few pockets of weakness that bear…

Sep 6 • 

Matthew C. Klein

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August 2025

What is the Federal Reserve Endgame?

Suborning the central bank will obviously have implications for monetary policy. But the power that could be exercised via regulatory and supervisory…

Aug 30 • 

Matthew C. Klein

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The Macro Impact of AI on GDP

Even if the underlying technology turned out to be mostly useless, the spending occurring right now is massive. And it may not be fully captured in the…

Aug 21 • 

Matthew C. Klein

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Inflation Is Moving the Wrong Way

Even if we try to "look through" the impact of tariffs, which could be unwise, the inflationary trend remains persistently faster than before the…

Aug 14 • 

Matthew C. Klein

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