Forward Guidance The Global Economy Is Splitting Into Spheres | Eric Wallerstein
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Mar 11, 2026 
Eric Wallerstein, Chief Macro Strategist at Clocktower Group and former CEA/Fed advisor, unpacks how geopolitics and policy are reshaping the global economy. He discusses tariffs, the dollar and supply chains. He traces market fallout from Iran strikes, energy shocks, and AI fears. He also examines Fed balance sheet fixes, repo fragility, and why Latin America may be a strategic frontier.
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Dollar Focus Is More Reality Check Than Strategy
- The administration "dollar policy" was more about calling out an overvalued real dollar than running a coordinated weak-dollar strategy.
- Policymakers now factor FX effects into trade and tariffs to support tradable sectors rather than leaving FX ignored by monetary policy.
Tangible Shocks Force Global Co-Movement And Dispersion Trades
- Geopolitical shocks like the Iran strikes create global co-movement across assets that masks country-level differences and opens dispersion trades.
- Eric highlights mismatches: Brazil vs India, Norwegian vs French duration, and argues markets are mispricing those geographic discrepancies.
Oil Spikes Hurt European Growth More Than They Help Inflation Control
- An energy-driven oil spike is initially inflationary but ultimately a negative growth impulse, especially for Europe where higher import prices hit terms of trade.
- Eric expects European cyclicals (autos, industrials) to suffer regardless of ECB rate moves.