Bill Conerly

Long-term economic growth is vital, significantly impacting future generations' prosperity and overall well-being. Even small annual growth rate differences compound dramatically over decades, leading to vastly different living standards. Businesses depend on these forecasts for capital investments and product development, as higher growth signals wealthier consumers. While some economists express pessimism about future growth due to diminishing returns, Nobel laureates like Joel Mokyr and Philippe Aghion remain optimistic, arguing new technologies like AI enable exponential progress if innovation isn't stifled. A critical trade-off exists between economic growth and stability. Policies prioritizing stability, such as strong labor protections or environmental regulations, can inadvertently hinder the "creative destruction" necessary for dynamic growth. The author predicts innovation will likely circumvent these stability-driven limits, leading to continued progress, echoing Mokyr's sentiment that "the best is yet to come."

Amidst global uncertainty from war, inflation, and AI's impact, businesses face pressure for cautious leadership. However, Cornerstone Advisors advocates for six bold strategic moves. First, abandon piecemeal modernization for a comprehensive, roadmap-driven approach. Second, focus on specific markets and products rather than chasing every opportunity. Third, develop and regularly update strategic roadmaps to guide future projects. Fourth, treat culture, like employee retention and customer satisfaction, as critical balance-sheet issues, not just HR concerns. Fifth, operationalize AI to enhance productivity and customer experience, or risk falling behind competitors. Finally, leverage mergers and acquisitions as a powerful tool for forced value creation and operational overhaul. These strategies offer a vital framework for all leaders navigating today's complex business landscape.

Business leaders often misdirect their economic focus, swayed by sensational news. Instead, they should prioritize key indicators to save time and reduce distraction. The article advises monitoring general economic activity via employment or GDP, inflation using CPI, and both short and long-term interest rates. It also suggests tracking industry-specific trends, relevant local economic data, and crucial supply-side issues like financial conditions, significant oil price spikes, and major labor disruptions. By establishing a focused economic dashboard with reliable sources like FRED, executives can gain essential insights, avoid misleading headlines, and confidently navigate the economic landscape, ultimately freeing up valuable time and attention.

Despite a slightly cooler inflation report, showing the Consumer Price Index up 3.4% annually and core inflation at 2.5%, the Federal Reserve is still likely to raise interest rates in September. Analysts anticipate a quarter-point hike, driven by persistent inflationary pressures rather than solely the latest monthly data. Economists caution against over-interpreting single-month CPI figures due to their inherent variability and sampling methods. The Fed focuses on underlying inflation, often disregarding volatile factors like tariffs or energy price swings, especially amidst the Iran War. Committed to its 2% target, the Fed will likely tighten policy due to years of excessive inflation and moderate economic growth, with the upcoming August CPI report also influencing their final decision.

Iran's Hormuz tolls redirect Gulf oil revenue to Tehran but leave world oil prices — and the US economic forecast — steady

Douglas Rissing/iStock via Getty Images The United States economy will be affected by how the war with Iran evolves or ends.

Artificial intelligence is making some occupations much more productive right now—but only a few so far.

Warsh's Jackson Hole remarks signal Fed interest rate hikes ahead, aimed at inflation that has stayed above target for 65 straight months now

While Warsh doesn't unilaterally set rates, he's poised to urge the Federal Open Market Committee for increases, with financial markets already adjusting to a higher probability of a hike.

Mortgage rates stay high as AI firms compete with homebuyers for capital, keeping home sales flat through 2027