Global Economics and Trade Policy by Brad Setser
Brad Setser is a Senior Fellow at the Council on Foreign Relations, known for his granular analysis of global capital movements and sovereign reserves. With a background at the U.S. Treasury and National Economic Council, Setser publishes the blog Follow the Money, which is regularly cited by Bloomberg, The Financial Times, and IMF working papers.
In August 2025, Setser published a breakdown of China’s hidden USD treasury holdings, revealing a true exposure of USD 1.1 trillion, a figure that contextualized Bitcoin’s role in circumventing capital controls. His research is followed by thousands of crypto macro traders who rely on sovereign behavior models to predict stablecoin flows and reserve diversification.
Setser does not advocate for crypto, but his empirical frameworks provide critical context for understanding its emergence within global balance sheet strategies.
European leaders see trade ties with China as unsustainable, Brad Setser notes
Brad Setser points out that European leaders are clear in describing the trading relationship with China as unsustainable. He notes that changes in the real, volume-based trade balance have been ...
Brad Setser: German auto exports to China drop sharply, exposing economic risks
Brad Setser highlights that Germany's auto exports to China accounted for about 0.6 percentage points of German GDP. Losing more than half of this market in a short period represents a significant ...
Financial repression underpins Chinese economic system, Brad Setser notes
Brad Setser highlights the significance of financial repression, both external and internal, in shaping the Chinese economic model. According to Setser, this aspect is a core component of how ...
Brad Setser: China state financial system foreign assets near $6 trillion
Brad Setser highlights that BIS data indicates a $2.5 trillion net foreign asset position for China's banking system, with most of it held in foreign exchange. When combining this with reported ...
China betting on export-driven growth without matching imports, Brad Setser warns
Brad Setser questions whether China's strategy of prioritizing export growth over import expansion will prove wise. He observes that China is relying on net exports to contribute around 1.5 ...
Brad Setser: Private foreign investors drive strong U.S. equity inflows in April
Brad Setser highlights that most analysts focus on the Treasury table in the monthly TIC data, but the key development in the April data was strong equity inflows. Setser notes that most of the ...
China reduces U.S. Treasuries held by custodians to 18-year low, Brad Setser notes
Brad Setser points out that China has decreased its holdings of Treasuries in U.S. custodians to an 18-year low. He clarifies that the headline should specifically reference Treasuries held in ...
Brad Setser: G7 participants differ on effectiveness of Plaza deal from 87 to 90
Brad Setser points out that many participants in the G7 group do not believe the Plaza deal was effective. However, he highlights that there was a very symmetric decline in the U.S. deficit and ...
Former SAFE economist uses basic BoP method for China financial account, Brad Setser notes
Brad Setser questions the decision of SAFE's former chief economist to use the most basic balance of payments (BoP) accounting split—specifically FDI, portfolio, other investments, and ...
Brad Setser: Exchange rates influence U.S. tourism flows as World Cup offsets impact
Brad Setser highlights how exchange rates affect trade flows, with a particular focus on tourism, which is classified as services trade. He also points to the World Cup as providing an offset to ...
China’s current account surplus trends differ from customs data, Brad Setser notes
Brad Setser highlights discrepancies in China’s reported current account surplus by comparing monthly customs data with the balance of payments (BoP) figures. Setser observes a significant ...
Brad Setser: Asia's surplus surge began before 2025 and was missed by IMF
Brad Setser challenges recent assertions that global imbalances are only now becoming excessive. He emphasizes that Asia's surplus began rising before 2025 and criticizes the IMF for overlooking ...
G7 leaders stop short on Asian currency action, Brad Setser notes
Brad Setser points out that while President Macron successfully brought attention to the return of imbalances, G7 finance ministers and central bank governors did not support a coordinated ...
Brad Setser: China monthly trade surplus tops $100 billion despite oil price shock
Brad Setser highlights that China's monthly trade surplus has returned to over $100 billion. This figure is notable given that China remains a significant importer of crude and semiconductor ...
China able to expand via net exports, Brad Setser notes
Brad Setser questions the notion that China, as the world's second largest economy, is entitled to ongoing growth by relying on net exports. He highlights that trade has traditionally been viewed ...
Brad Setser: U.S. multinational tax strategies distort Eurozone external data
Brad Setser points out that the analysis of the Eurozone's external position is significantly impacted by the activities of U.S. multinational enterprises seeking to avoid U.S. taxes through ...
Stronger exchange rate fixes fuel appreciation bets, Brad Setser notes
Brad Setser explains that China has been actively adjusting its exchange rate by implementing stronger daily fixes, which has pushed spot rates higher and led to expectations of further currency ...
Brad Setser: Higher rates could make defending yen easier amid oil price pressures
Brad Setser writes that defending the yen would be easier if short-term rates were higher or if real rates were not negative. He adds that, despite such challenges, recent actions by the ...
Excessive financial inflow into U.S. before global crisis led to trouble, Brad Setser warns
Brad Setser reflects on concerns about economic imbalances during a period when China primarily produced low value added goods. He points to the excessive financial inflow into the U.S. prior to ...
Brad Setser: China’s demand cannot keep pace with supply without major exports
Brad Setser highlights that China’s current demand levels are insufficient to support its rising supply unless the country pursues large-scale exports. He points out that many trade purists ...
China's currency weakness and import gap are unresolved issues, Brad Setser notes
Brad Setser highlights concerns about China's current economic situation. He points to ongoing weakness in China's currency and suggests that authorities are intervening, based on settlement ...
