In October, in a three-part series, we explained why we think the odds of achieving a Goldilocks soft-landing are far lower than the market assumes (“Questioning the Narrative”). One reason for our scepticism is that historically, labour markets are momentum plays. Essentially, they don’t track sideways for long. Hence, our view that the current low hire and low fire stasis in the US labour market isn’t a sustainable.
As you know, it’s been our view for a while that investors’ assumption of a soft landing in the US was likely misplaced. Rather, the most likely scenario is either a reacceleration of inflation and growth or a recession, with the determining factor being the labour market.
In the market section, we outlined that for a myriad of factors, almost every client expected renewed dollar weakness to be one of the key macro events in 2026. Yet, no one was currently “running material FX risk”.
The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving.
In this conversation, MI2’s Harry Melandri sits down with colleague, Jeff Uscher, to explore the global consequences of a profound shift in industrial policy—and why Japan is rapidly becoming central to the macro narrative. Harry presents Jeff as a uniquely valuable member of the MI2 team, highlighting his fluency in Japanese, his unparalleled access to policymakers, and a 45-year career spanning trading desks, Grant’s Interest Rate Observer, and Medley Global Advisors. Jeff’s ability to interpret the intersection of policy, markets, and corporate behavior sets the tone for a wide-ranging discussion on capital flows, equity markets, and monetary dynamics.
More content for you in an easily digestible format! The Japan News Weekly Digest is our weekly summary of the Japan Update. This piece encapsulates and references the Japan Updates published in the last week so you can easily understand what you may need to dig into.
As a quick reminder, the Japan Update, our market commentary piece, is uniquely sourced from Japanese language publications. Published 10-15 times a month and written by Jeff Uscher, a Western educated and US located, fluent Japanese financial writer. You can always sign up to receive the Japan Update when it is initially published in your account notification settings. As always, please reach out with any questions or comments!
The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving.
As you know, we believe the odds of achieving the perfect soft-landing are low, with the most likely outcome a recession, or if we can make it to early summer without an exogenous shock, a reacceleration of inflation, and with the deciding factor the labour market (“Will SMEs Determine the Direction of the US Economy” 12th Nov).