Bi-Weekly Geopolitical Report – US Influence on the Wane: New Evidence (September 29, 2025)

by Patrick Fearon-Hernandez, CFA  | PDF

World history goes through phases, not as a cycle of recurring situations but as a series of “regimes” or broad sets of trends and relationships. Each regime is complex, since it encompasses issues such as the political landscape in various countries, the dominant global approach to economic policy and trade relationships, the structure and operation of security alliances, and even cultural norms. The most recent regime was the post-Cold War period of globalization that ended around 2008. Since each regime is so complex, and its elements or facets can change at a different pace, it can be hard to know for sure that a transition is taking place. It can be even harder to know what the new, following regime will look like.

Importantly, several major developments over the last few months have confirmed that the world is still transitioning away from the Globalization period. These developments have also provided added evidence about what to expect during the incoming regime of Global Fracturing or, potentially, Chinese Hegemony. As shown in this report, one key message is that the US continues to lose influence in international affairs as it steps back from its traditional role as global hegemon. Recent evidence of this includes the latest United States-China trade talks, the Russian drone incursions in Poland and Romania, and Israel’s attack on Hamas officials in Qatar. These developments are in line with other examples in recent years, such as the Obama administration’s decision not to enforce its “red line” against Syria’s use of chemical weapons in its civil war and the Biden administration’s chaotic withdrawal of US forces from Afghanistan. In this report, we discuss the latest developments and outline how they might affect financial markets going forward.

Read the full report

Don’t miss our accompanying podcasts, available on our website and most podcast platforms: Apple | Spotify 

Bi-Weekly Geopolitical Report – Mid-Year Geopolitical Outlook: Searching for the Endgames (July 14, 2025)

by the Confluence Macroeconomic Team  | PDF

As the first half of 2025 draws to a close, we typically update our geopolitical outlook for the remainder of the year. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of 2025. The report is not designed to be exhaustive. Rather, it focuses on the “big picture” conditions that we think will affect policy and markets going forward. Our issues are listed in order of importance.

Issue #1: US-China Tensions Remain

Issue #2: Russian-Ukraine War Continues

Issue #3: Fallout From Israel-Iran War

Issue #4: US Mulls Capital Controls

Issue #5: Prospects for Lasting Economic Change in Europe

Issue #6: AI Investing Gets Second Wind

Read the full report

The podcast episode for this particular edition will be posted under the Confluence of Ideas series later in the week.

Bi-Weekly Geopolitical Report – NATO’s Baltic Vulnerability: Implications for Europe (June 9, 2025)

by Patrick Fearon-Hernandez, CFA  | PDF

When Sweden and Finland finally joined the North Atlantic Treaty Organization in 2024, the alliance gained important new territory and military capabilities on its northeastern flank. However, the expansion hasn’t necessarily been enough to fully deter potential Russian aggression against NATO in that theater. Indeed, NATO’s expansion has prompted Russia to increase its military resources there. Northeastern Europe and the Baltic Sea remain an important potential flashpoint for conflict between the West and Russia. In this report, we show how NATO remains vulnerable to Russian threats in the northeast. Against the backdrop of President Trump trying to reduce the United States’ role in European defense, we also examine how the Russian threat is prompting shifts in Europe’s defense and economic policy. We wrap up with a discussion of the resulting investment implications.

Read the full report

Note: The accompanying podcast for this report will be delayed until later this week.

Don’t miss our accompanying podcasts, available on our website and most podcast platforms: Apple | Spotify 

Bi-Weekly Geopolitical Report – Growing Fragility in the US Bloc (April 7, 2025)

by Patrick Fearon-Hernandez, CFA  | PDF

We at Confluence have written extensively on the end of post-Cold War globalization and the fracturing of the world into various geopolitical and economic blocs. We’ve noted that the large, rich bloc led by the United States is an attractive place for investors, but fractured supply chains and rising international tensions may produce a range of economic and financial market problems, from elevated consumer price inflation to higher and more volatile interest rates. In this report, we explore what could happen to the US bloc as President Trump pursues his aggressive policies to push the costs of Western security and prosperity onto the US’s traditional allies. As we’ve noted before, those policies run the risk of reducing US influence with its allies and undermining cohesion within the US bloc. We assess in this report that reduced cohesion probably won’t splinter the US bloc in the near term. Nevertheless, we begin laying out how the world could change if the US bloc does disintegrate, and we discuss the economic and market implications if it does.

Read the full report

Don’t miss our accompanying podcasts, available on our website and most podcast platforms: Apple | Spotify