Weekly Macro Brief – week of 17–24 Nov 2025
- Fed cuts are no longer guaranteed — and the data is messy: The delayed jobs report showed hiring slowing (119K jobs) and unemployment rising to 4.4%, but not enough weakness to force a cut. Fed officials disagree sharply: some want to pause, others want to cut again. Markets now see December as a 50/50 chance instead of a sure thing. Shutdown-distorted data makes the Fed’s job harder. [WF][JPM-WM]
- AI profits remain strong — but investors are questioning the “quality” of those earnings: S&P 500 earnings keep rising, and AI-linked companies still drive most upgrades. But there’s debate about whether tech giants are using slow depreciation (5–6 years instead of 2–3) to make profits look better. Risky AI-themed assets (Bitcoin, meme ETFs) also sold off, showing nerves around the theme. [EY][MER]
- Consumers look okay overall — but the gap between rich and poor is widening fast: Spending grows 2–3%, but mostly because wealthy households are flush with stock-market and housing gains. Lower-income households face weak wage growth, unaffordable housing and rising delinquencies. Consumer sentiment is at recession-like lows (51) even though stocks are near record highs — a disconnect we’ve never seen before. [JPM-AM][MER][CB]
- Tariffs and energy: inflation is sticking around, but not spiraling: Tariffs are keeping goods prices elevated (coffee +20%, canned goods +5%). The government rolled back some food tariffs, but they’re too small to move overall inflation. AI data-centers will push electricity demand up, with some regions seeing 40–60% higher power prices by 2030 — but energy is such a small share of consumer budgets that the national impact stays limited. [WF][MER]
- Europe looks cheap and is slowly reforming — but still best used selectively: European stocks trade at large discounts vs the U.S. Activity is stabilizing and some major reforms are underway. BlackRock stays neutral overall but prefers financials, utilities and healthcare, with defense and AI-adoption opportunities on the radar. [BLK]
Sources:
https://mlaem.fs.ml.com/content/dam/ML/ecomm/pdf/CMO_Merrill_11-17-2025_ada.pdf