↪re: Playing for Time
Who gains, who waits, and who loses in the great power shuffle
→ econVuere:Vue ↪ February 28, 2025
Dear Readers,
The older generation of leadership—Trump, Ishiba, Modi, and Xi— are moving rapidly to secure their legacies and reshape their nations’ futures. Sclerotic Europe has been awakened by the realization that the American polity no longer supports its postwar role as the world’s policeman. For these leaders, time is of the essence.
President Trump appears to be advancing President Obama’s pivot to Asia, working (albeit somewhat impatiently) to unwind the conflict in Ukraine and facilitate diplomatic efforts between Israel and Saudi Arabia to resolve the war in Gaza. Meanwhile, back in Washington, the entire federal government is under review.
In my view, these efforts are reactions to two forces that are propelling the world forward at a rapid pace: China’s global ambitions, and unsustainable increases in sovereign debt. So while the world is playing for time, there is really not much time left to solve or ameliorate a host of inescapable global challenges. While this sense of urgency is not misplaced, it is certainly unsettling.
Staying Afloat
Although equity markets have been volatile, bond markets have responded positively with a more optimistic forward looking view on US debt based on the assumption that fiscal policy will tighten, My fellow Chicagoan Jim Bianco believes that “Trump’s measure of success is no longer a rising S&P 500; it is now a falling 10-year yield.” And according to Bloomberg:
As powerful as the Federal Reserve is, with its control of short-term rates, and as much sway as it has on stock market sentiment, it’s the 10-year Treasury rate that largely determines the cost of money for homebuyers and the biggest US companies. Bring that rate down and it’ll pave the way for millions of Americans to buy the house they’ve wanted for years and, in the process, stoke faster economic growth and curb the alarming surge in the government’s annual interest tab.
The Economics of Tariffs
If unemployment rises, and tariffs go into effect, the likely result is that monetary policy will be expansionary in the months to come. The Fed’s dual mandate requires the former, and the latter is receiving theoretical support:
❝ We show that the optimal monetary response is expansionary. —Economists Paul R Bergin and Giancarlo Corsetti
Potential Disruptors
econVue experts have been keeping track of these developments. The issue of economic change and instability is addressed by Marsha Vande Berg in her two Vuepoints below, and by me in my Feb 8 article, Inundation. I think it is fair to say that I am more sanguine, but Marsha is right to be concerned about current volatility stemming from Washington. Mark Roeder writes about the impact of DeepSeek and technological developments.
China’s Blue Water Navy: The View from Australia
As America retreats from aspects of its previous role in the world order—if not the world economy—China is advancing across seas and continents far from home. Recent live-fire naval exercises have taken place near Australia, Argentina, Vietnam, and of course Taiwan. This is an image from Chinese social media showing recent PLA Navy activities near Australia:
Eleanor Hughes, a non-resident fellow at econVue and Asian defense analyst, has launched her new podcast called Hughes News. Episode 1 features a conversation with Australian defense expert Steven Dziedzic in which they discuss this topic in depth. The link is below.
Taiwan
There are many similar images you can find across the world, particularly in the Taiwan Strait, raising concerns. I highly recommend listening to my podcast with Kerry Brown, a distinguished China expert, who has recently written a book about the situation in Taiwan. I can think of nothing more consequential than the future trajectory of this conflict. Professor Brown believes that a stalemate is the best we can achieve.
In these rough and tumble times, we remain committed to bringing you fact-based insights to help navigate this evolving landscape. With so many moving parts, from the Fed’s dot plots to China’s expanding naval footprint, understanding these interrelated changes is more critical than ever.
–𝓁𝓎𝓇𝒾𝒸 💬
Editor-in-Chief
re:Vue is all our newsletters condensed into one convenient, unobtrusive e-mail, prefaced by our editorial commentary. You can select exactly which econVue newsletters you receive or omit, including this one, at any time in your econVue account..: Stories in ↪re:Vue
↪: Now on econVue 🔈
1.:
🎧 THE HALE REPORT™ ⸱ Episode 66
Kerry Brown – Taiwan, from the Kangxi Emperor to Today →
Hosted by LYRIC HUGHES HALE ⸱ Jan 28, 2025
In Episode 66 of The Hale Report, Lyric Hughes Hale interviews Kerry Brown. His new book Why Taiwan Matters: A Short History of a Small Island that will Dictate Our Future was released this January in the US. Professor Brown doesn’t see a way out of the current status quo in Taiwan, and says a stalemate is the best we can do for now.
2.:
👥 PANELS
Panel Recap: 2025 PreVue →
The impact of new financial technologies and digital payment regulations.econVue VOICES • JAN 29, 2024
If you missed our discussion on Jan 29th, we invite you to listen to our panel discussion. : AI, energy, the Middle East, jobs, tariffs, inflation, robots, cryptocurrencies, the US political transition, and more from our expert commentators. 💬
↪: Latest articles
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§ Policy & MicroINUNDATION →
The Trump TsunamiLYRIC HUGHES HALE ⸱ FEB 9, 2025
“February it is said, is an honest month, without the pretensions of summer, the promise of spring, or the abundance of autumn. The leaves no longer shield buildings and homes, which are now clearly visible. February’s light is soft and subdued, and grass is grayed, as if a fine dust has settled over everything, including the sky. It is not harsh, but it is still revealing.
🖊️ Vue⫶𝓹𝓸𝓲𝓷𝓽𝓼
⇣
econVue contributors share their latest thoughts on the global economy and their experiences covering it
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🎧 HUGHES NEWS ⸱ Episode 1
Stephen Dziedzic– The View from Australia→
Hosted by ELEANOR HUGHES ⸱ Feb 17, 2025
❝ The brutal truth is that Australia would not be putting all of this money, all of this time, all of this effort and all of these resources into the Pacific, were it not for the galvanizing fact of China’s emergence as a major player in the Pacific and China’s desire, as Australia sees it, to try and secure a strategic or a military foothold in the Pacific.
– Stephen Dziedzic
↪: Who’s on econVue
8.:
VOICES📍Washington DC
Eleanor Shiori Hughes is currently a Non-Resident Fellow at EconVue. Her research interests span a wide range of subjects including U.S. engagement in the Indo-Pacific; Japanese and Australian foreign policy; the Pacific Islands; and the nexus of business, technology and geopolitics in Asia, especially semiconductors.
Focus
→ US engagement in the Indo-Pacific
→ Japanese foreign policy and security
→ Japan-Taiwan relations
→ Australia and teh Pacific Islands
→ Nexus of business and geopolitics
↪: Off econVue 🔈
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Lyric Hughes Hale is interviewed by Ed D’Agostino from Mauldin Economics (54:03) Feb 7, 2025
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Lyric Hughes Hale on TRT World @The_Newsmakers -Turkish Public Broadcasting (25:12) February 24. 2025
Remembering William Overholt
A final note, one of my first podcasts was with an old friend and fellow Asianist, Bill Overholt. He sadly left us, as announced by the Mossavar-Rahmani Center at the Harvard Kennedy Center: M-RCBG remembers William H. Overholt (1945-2024)
Here is the podcast if you would like to have a listen.
