When do higher bond yields become a problem for the economy and stocks?

 The UK just held its budget, and France is trying to pass one. Both economies have both been in the bond market's sights this year. Their deficits are of a similar size, but the political outlook and institutional structures are very different. In this episode of Macro Bytes, Paul Diggle and Lizzy Galbraith are joined by Felix Feather to compare and contrast the economic, political and bond market challenges on both side of the Channel.

With less than one week to go until the second round of the Brazilian presidential election, Lizzy Galbraith is joined by Tettey Addy to discuss the candidacies of Flavio Bolsonaro and incumbent President Luiz Inácio Lula da Silva, including what the first round tells us about the likely outcome, whether the next president can meet investor expectations of ambitious fiscal reform, and what the outcome means for Brazilian foreign policy.

President Trump may not be on the ballot, but the 2026 US midterms are shaping up to be a referendum on his presidency. Paul Diggle and Lizzy Galbraith unpack strong Democratic momentum, what Aberdeen's election model implies for control of Congress, the key Senate battlegrounds to watch, and what different election outcomes could mean for fiscal policy, AI regulation, and financial markets.

The global monetary policy cycle has turned back to hiking, following two years of (nearly) synchronised rate cuts.In this episode of Macro Bytes, Chief Economist Paul Diggle is joined by Jon Butcher, Felix Feather and Sree Kochugovindan from Aberdeen's Global Macro Research team to discuss the shift back towards monetary tightening.A week or two on from major decisions from the US Federal Reserve, Bank of England, European Central Bank and Bank of Japan, the team assesses whether policymakers are delivering a small number of "risk management" rate hikes, or embarking on a sustained tightening cycle.The discussion examines the economic forces driving rate hikes, including high energy prices, currency developments, and rising estimates of neutral interest rates. The team also explores an increasingly important issue: the growing intersection between central banking and politics.

AI may be digital, but its success depends on a very physical reality: data centre construction. As investment in AI infrastructure surges, local opposition is growing too, with concerns over power use, water consumption, visual intrusion, and noise all prominent. In this episode, Paul and Lizzy are joined by Nancy Hardie from Aberdeen’s sustainability team, and Tim O'Reilly from datacentre developer Tritax. They explore the economics, politics and geopolitics of the AI infrastructure buildout. Is opposition to datacentre construction a risk to the “AI trade”? Is this backlash a stand-in for broader societal concerns about who benefits from, and who pays for, the AI revolution? And what does responsible datacentre construction look like in practice? 

Long-term bond yields have been hitting multi-decade highs. Lizzy Galbraith and Paul Diggle discuss the drivers of this increase in government borrowing costs, what policymakers can and can’t do about it, and at what point higher yields weigh on the economy and broader financial markets. The AI capital investment boom and hyperscaler issuance are playing an important role in driving yields up, but that may turn mean that the impact is different to what conventional wisdom would suggest.

Andy Burnham is set to become Britain’s Prime Minister on 20 July and promises a new style of governance - “Manchesterism”. Luke and Lizzy discuss what Manchesterism means in practice, whether devolution is a credible growth strategy, how a Burnham government might navigate financial markets, and how tight fiscal constraints could ultimately limit both its policy agenda and political fortunes.

Many economists and investors try to predict the business cycle in order to time their investments into financial markets. In this episode, Paul and Luke speak to Tyler Goodspeed, author of “Recession: The Real Reasons Economies Shrink and What to Do About It”, who rejects much conventional wisdom on the business cycle, arguing instead that recessions are the result of external shocks that cannot be predicted. They discuss why humans are pre-disposed to see patterns in economic data, the usefulness or otherwise of business cycle timing indicators, and the likelihood of the current energy shock causing a recession.

Most central banks started the year preparing to cut interest rates further. Then geopolitics intervened. In this episode Paul and Luke unpack how the Iran-driven energy shock has upended rate expectations, why different central banks are responding in different ways, and what that means for inflation and growth. We also tackle two key market questions: what will new Fed chair Kevin Warsh do with the balance sheet, and can equities stay resilient as inflation spikes and yields rise?

Near earth orbit is increasingly a site of economic activity, and a domain of great power competition. Paul and Luke are joined by Hannah Lee, Thematic Investment Researcher at JP Morgan, to discuss how the collapse in launch costs has opened up a wide range of commercial use cases for space, the prospect of placing data centres, semi-conductor fabrication, and pharmaceutical development in orbit, and the way in which space has become a strategic military domain.