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Victoria Coleman, William Downe and Lisa Gordon-Hagerty Elected to RAND Board of Trustees
SANTA MONICA, California, April 25 -- Rand issued the following news release on April 24, 2026:
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Victoria Coleman, William Downe and Lisa Gordon-Hagerty Elected to RAND Board of Trustees
National security and technology leader Victoria Coleman, financial executive William Downe and nuclear security expert Lisa Gordon-Hagerty have been elected to RAND's Board of Trustees.
As trustees, they join an esteemed group of leaders from public service, business and academia tasked with ensuring RAND carries out its mission effectively, uses its resources prudently and fulfills its purpose as a nonprofit
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SANTA MONICA, California, April 25 -- Rand issued the following news release on April 24, 2026:
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Victoria Coleman, William Downe and Lisa Gordon-Hagerty Elected to RAND Board of Trustees
National security and technology leader Victoria Coleman, financial executive William Downe and nuclear security expert Lisa Gordon-Hagerty have been elected to RAND's Board of Trustees.
As trustees, they join an esteemed group of leaders from public service, business and academia tasked with ensuring RAND carries out its mission effectively, uses its resources prudently and fulfills its purpose as a nonprofitresearch organization.
"Victoria, William and Lisa each bring deep expertise and a shared commitment to public service," said Jason Matheny, RAND president and CEO. "Their leadership and insight will strengthen RAND's ability to address complex challenges facing our nation and the world."
Coleman is a professor in the Electrical Engineering and Computer Sciences Department at the University of California, Berkeley and the associate provost for the Berkeley Air & Space Center. She previously served as the chief scientist of the U.S. Air Force and director of the Defense Advanced Research Projects Agency (DARPA). Her career spans more than 35 years, including senior positions in academia and industry. She holds a doctorate in computer science from the University of Manchester.
Downe is the retired chief executive officer of BMO Financial Group, where he led the company's North American expansion and commitment to community investment. He previously was the deputy chair and head of BMO Capital Markets and brings decades of experience in global finance, corporate governance and leadership development. He has a master's degree from the University of Toronto and a bachelor's degree in economics from Wilfrid Laurier University.
Gordon-Hagerty is chief executive officer of Wolverine Global, a consulting firm focused on national and energy security. She previously served as Administrator of the National Nuclear Security Administration and Under Secretary for Nuclear Security at the U.S. Department of Energy. Her career spans more than 30 years in national security including a senior role on the White House National Security Council staff. She has a master's degree in public health and a bachelor's degree from the University of Michigan.
Coleman, Downe and Gordon-Hagerty succeed departing trustees Kenneth Feinberg, Philip Lader and Leonard Schaeffer, who have completed their terms of service. The Board also reelected Michael Leiter as Chair and elected David Porges as Vice Chair.
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About RAND
RAND is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous.
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Original text here: https://www.rand.org/news/press/2026/04/victoria-coleman-william-downe-and-lisa-gordon-hagerty.html
[Category: ThinkTank]
Ifo Institute President Fuest Issues Statement on Business Climate Index
MUNICH, Germany, April 25 -- ifo Institute issued the following statement on April 24, 2026, by President Clemens Fuest on the Business Climate Index:
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ifo Business Climate Index Down (April 2026)
Sentiment among companies in Germany has significantly deteriorated. The ifo Business Climate Index fell in April to 84.4 points, down from 86.3 in March. This is the lowest level since May 2020. Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis.
In manufacturing, the
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MUNICH, Germany, April 25 -- ifo Institute issued the following statement on April 24, 2026, by President Clemens Fuest on the Business Climate Index:
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ifo Business Climate Index Down (April 2026)
Sentiment among companies in Germany has significantly deteriorated. The ifo Business Climate Index fell in April to 84.4 points, down from 86.3 in March. This is the lowest level since May 2020. Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis.
In manufacturing, thebusiness climate deteriorated. This was due to significantly more pessimistic expectations, especially in the chemical industry. By contrast, companies assessed their current situation as somewhat better. They did, however, increasingly report supply bottlenecks.
In the service sector, the index fell considerably. Expectations continued to deteriorate. Assessments of the current situation were also worse. The logistics industry in particular is under pressure. The outlook there is grim.
In trade, the business climate dropped significantly. Companies noticeably adjusted their assessments both for expectations and the current situation downward. Retailers are worried in particular that consumers will be more reticent due to rising inflation.
In construction, the business climate plummeted. Expectations fell by almost 10 points. Companies were considerably less satisfied with current business. Hopes for an upswing have been dashed for now.
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Survey
25 April 2026
ifo Business Climate Index for Germany
ifo Business Climate Index Down (April 2026)
Sentiment among companies in Germany has significantly deteriorated. The ifo Business Climate Index fell in April to 84.4 points, down from 86.3 in March . This is the lowest level since May 2020. Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis.
Learn more (https://www.ifo.de/en/facts/2026-04-25/ifo-business-climate-index-down-april-2026)
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Original text here: https://www.ifo.de/en/press-release/2026-04-24/ifo-business-climate-index-down-april-2026
[Category: ThinkTank]
Center of the American Experiment Issues Commentary: When Grades and Test Scores Conflict, What Should Parents Rely On?
GOLDEN VALLEY, Minnesota, April 25 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on April 24, 2026, by policy fellow Catrin Wigfall:
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When grades and test scores conflict, what should parents rely on?
There are many different measures used to determine how a student is doing academically -- teacher observations, in-class assignments, quizzes, report cards, benchmark exams, and standardized tests, to name a few. But when those measures send conflicting signals, what should parents
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GOLDEN VALLEY, Minnesota, April 25 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on April 24, 2026, by policy fellow Catrin Wigfall:
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When grades and test scores conflict, what should parents rely on?
There are many different measures used to determine how a student is doing academically -- teacher observations, in-class assignments, quizzes, report cards, benchmark exams, and standardized tests, to name a few. But when those measures send conflicting signals, what should parentsrely on to understand their child's academic progress (or lack thereof)?
A new study from the University of Chicago and Oregon State University suggests many parents have already made up their minds. Seventy-one percent said that grades are more important than standardized test scores when making decisions about their children's education.
But with grade inflation continuing to rise, report cards are making it difficult for parents to know how their child is performing. Standardized tests, while far from perfect, are less susceptible to local inflation. Ignoring them may mean "there's skills that we're leaving on the table," said Oregon State University Assistant Economics Professor Derek Rury, co-author of the study, in an interview with The 74. The study elaborates:
"When test scores are high but grades are low, parents invest: they treat the low grade as actionable, recommending additional time and money for academic support. When grades are high but test scores are low, parents do not invest... High grades crowd out the investment response that low test scores would otherwise trigger. This pattern implies that parents receiving inflated grades will fail to make remedial investments that their children's actual achievement levels warrant."
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"...[O]ur finding that test scores trigger investment when grades are concordantly low suggests that maintaining standardized testing preserves a valuable information channel -- one whose influence depends on the quality of grade information parents already possess."
If parents place more confidence in grades than test scores, "that has very big implications for the economy and the growth of skills [in students]," Rury told The 74.
Why do parents prioritize grades?
The study (https://bfi.uchicago.edu/wp-content/uploads/2026/02/BFI_WP_2026-20.pdf) explored a few possible reasons for why parents value grades more, including that grades are familiar, frequent, and easier to interpret than standardized tests. Some parents also worry that the tests are "unfair, culturally biased, or reflect family background more than actual ability."
However, the authors concluded, "none of these self-reported beliefs fully explain why parents prefer grades." Whatever the reason, the result is the same: Parents discount information from standardized test scores, "even though those scores often provide a more objective measure of skills than grades. This pattern reveals an informational failure in the education market."
And it is a pattern that should be concerning to all who care about educational outcomes. For years, teachers' unions have pushed back against standardized testing, arguing that it's too rigid or unfair. But scaling back these assessments without fixing the problem of grade inflation doesn't help students.
New research (https://www.americanexperiment.org/grade-inflation-and-its-impacts-on-students/) from the University of Texas found that grade inflation can not only reduce a student's future test scores but the probability of graduating high school and enrolling in college, and lifetime earnings.
At the end of the day, the issue is whether or not parents are getting an honest picture of their child's academic progress. If that picture is distorted, the consequences can follow students long after they leave the classroom.
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Catrin Wigfall is a Policy Fellow at Center of the American Experiment.
catrin.wigfall@americanexperiment.org
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Original text here: https://www.americanexperiment.org/when-grades-and-test-scores-conflict-what-should-parents-rely-on/
[Category: ThinkTank]
Capital Research Center Issues InfluenceWatch Wrapup on April 24, 2026
WASHINGTON, April 25 -- The Capital Research Center issued the following InfluenceWatch wrapup on April 24, 2026, by Jonathan Harsh:
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InfluenceWatch, a project of Capital Research Center, is a comprehensive and ever-evolving compilation of our research into the numerous advocacy groups, foundations, and donors working to influence the public policy process. The website offers transparency into these influencers' funding, motives, and connections while providing insight often neglected by other watchdog groups.
The information compiled in InfluenceWatch gives news outlets and other interested
... Show Full Article
WASHINGTON, April 25 -- The Capital Research Center issued the following InfluenceWatch wrapup on April 24, 2026, by Jonathan Harsh:
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InfluenceWatch, a project of Capital Research Center, is a comprehensive and ever-evolving compilation of our research into the numerous advocacy groups, foundations, and donors working to influence the public policy process. The website offers transparency into these influencers' funding, motives, and connections while providing insight often neglected by other watchdog groups.
The information compiled in InfluenceWatch gives news outlets and other interestedparties research to use in reporting on significant topics that are often overlooked by the American public.
CRC is pleased to present some of the most significant additions to InfluenceWatch in the past week:
* Allied Climate Partners (ACP) is an investment organization that uses capital from foundations and other nonprofits to fund climate projects and other environmental initiatives in developing countries. ACP was launched at the United Nations' COP28 climate conference in Dubai in 2023, and its initial funders included Arnold Ventures, the Ballmer Group, the Bezos Earth Fund, the Children's Investment Fund Foundation (CIFF), the Sea Change Foundation International, and the Soros Economic Development Fund (SEDF).
* Media in the Public Interest (MPI) is a nonprofit media training organization that provides journalists and other nonprofits with programs aimed at creating "more influential progressive leaders" by improving communication and messaging. MPI is affiliated with the for-profit Public News Service. Its listed funders include the Ben and Jerry's Foundation, the Ford Foundation, the George Gund Foundation, the Needmor Fund, and the Park Foundation.
* Bristol Bay Regional Seafood Development Association is a business association that advocates on behalf of fisheries and fishermen in Alaska's Bristol Bay watershed region. It opposes large-scale industrial extraction activities in the area, and assists the local fishing industry through advocacy campaigns, social media, and apprenticeship programs. The group has previously made grants to recipients that include the New Venture Fund, the University of Washington, and the United Tribes of Bristol Bay.
* Center for Immigrant and Refugee Advancement (CIRA) is a Nebraska-based nonprofit that provides legal representation and resettlement services for migrants and refugees within the state. Services include pro bono legal services for unaccompanied children and survivors of domestic violence as well as administering federal refugee resettlement contracts. CIRA has received funding from the Sherwood Foundation and the Hawks Foundation.
* Business for Social Responsibility is a member-based nonprofit consultancy that helps corporations develop environmental, social, and governance (ESG) business strategies and solutions. Its members include the Coca-Cola Company, Microsoft, Amazon, Google, Meta, Pfizer, Target, Uber, and the Walt Disney Company. It has received funding from DAFGiving360, the We Mean Business Coalition, the VF Foundation, and the Gates Foundation.
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Jonathan Harsh holds a master's degree in political science from James Madison University and a bachelor's degree in political science from Beloit College.
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Original text here: https://capitalresearch.org/article/influencewatch-friday-04-24-2026/
[Category: ThinkTank]
CSIS Issues Critical Questions Q&A: Section 702 - Why Do We Need It?
WASHINGTON, April 25 -- The Center for Strategic and International Studies issued the following Critical Questions Q&A on April 24, 2026, involving Emily Harding, director of the Intelligence, National Security and Technology Program and vice president of the CSIS Defense and Security Department:
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Section 702: Why Do We Need It?
Section 702 of the Foreign Intelligence Surveillance Act allows the National Security Agency (NSA), Central Intelligence Agency (CIA), Federal Bureau of Investigation (FBI), and National Counterterrorism Center (NCTC) to collect communications between foreigners
... Show Full Article
WASHINGTON, April 25 -- The Center for Strategic and International Studies issued the following Critical Questions Q&A on April 24, 2026, involving Emily Harding, director of the Intelligence, National Security and Technology Program and vice president of the CSIS Defense and Security Department:
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Section 702: Why Do We Need It?
Section 702 of the Foreign Intelligence Surveillance Act allows the National Security Agency (NSA), Central Intelligence Agency (CIA), Federal Bureau of Investigation (FBI), and National Counterterrorism Center (NCTC) to collect communications between foreignersoverseas. Those last two words are the most important: The program only allows the Intelligence Community to read the communications of non-U.S. persons who are outside the borders of the United States. Congress must decide by April 30 whether to renew the program again, let it lapse, or make sweeping, potentially dangerous reforms to this longstanding authority, including adding a requirement for a warrant before a search. The right answer is a straightforward reauthorization that allows full evaluation of recent reforms before making additional changes.
Q1: How did Section 702 become one of the United States' most valuable intelligence tools?
A1: Lawmakers first established Section 702 in 2008, when it was clear that terrorist groups outside the United States were using U.S.-based telecoms infrastructure to communicate. This was an accident--and a benefit--to U.S. innovation and excellence in the IT sphere. Even terrorist groups recognized that U.S. companies provided the best email services.
Lawmakers decided that those communications are a legitimate target for U.S. intelligence agencies like the NSA, even though they passed through infrastructure in the United States. In the era of internet-based communications, there were no borders to electronic transmission. However, lawmakers also recognized that U.S. citizens, who are protected from intelligence surveillance, were using those same pipes and could not be distinguished from foreign sources--no one adds their citizenship to their email address.
Thus, Congress wanted additional oversight on the collection. They wanted extra protections in place to protect the communications of U.S. citizens. For example, they specifically moved away from "bulk" data collection and instead required that Section 702 users already have a specific email address or phone number to search the collection in a laser-targeted way.
With these protections in place, the program has been hugely impactful. It has prevented terror attacks; it has also thwarted international criminal groups, Russian cyberattacks, Chinese spies, and fentanyl trafficking. FBI has used its ability to run searches to warn victims of cybercrimes and targets of espionage. As George Croner wrote in a recent piece:
During the last reauthorization debate in the 2023-2024 cycle, the government reported that this single collection asset supported 60 [percent] of the articles in the President's Daily Brief; that 70 [percent] of the CIA's illicit synthetic drug disruptions with foreign partners stemmed from Section 702 data; that 70 [percent] of the CIA's successful weapons and counterproliferation disruption derived from Section 702 data; and, that 100 [percent] of the president's intelligence priorities topics reported on by NSA were supported by Section 702-derived intelligence.
Congress--with the support of presidents from both parties--renewed the program in 2012, 2018, and 2024. When President Donald Trump signed the 2018 renewal during his first term, he said he would have preferred to make Section 702 permanent. This year, he has supported a clean reauthorization of the program, saying Section 702 is "one of the reasons we have had such tremendous SUCCESS on the battlefield." In other words, the government wants to extend it, as is, for several years. This is the right policy. The last round of reforms has honed compliance, and FBI has proven it can use the program responsibly.
Q2: If the program is so effective, why is it so controversial?
A2: The program's critics say it is an overreach of government authority and puts the privacy rights of U.S. persons at risk. They argue that U.S. persons' data gets collected alongside that of foreign entities. For example, if foreigners outside the United States are communicating with U.S. persons, those communications turn up in the queries as well. Congress understood this risk when it created the program. The same piece by Croner puts it this way: "Congress has always recognized that 'it is simply not possible to collect intelligence on the communications of a party of interest without also collecting information about the people with whom, or about whom, that party communicates including, in some cases, non-targeted U.S. persons.'"
That collection, once lawfully collected in U.S. government systems, can provide key insights for foreign threats that pass into the domestic space. One of the findings of the 9/11 Commission was that foreign intelligence agencies knew part of the picture, and FBI knew part of the picture, but they had failed to connect the dots across the seams in U.S. authorities. Section 702 solves that problem: FBI now knows what vector a terrorist might be using to execute a plot inside the United States. For non-terrorism applications, FBI also knows who the victims of a hacking crime might be, or who might be the target of a Chinese intelligence operation. They can use that information to alert victims, now even more often than they catch terrorists.
Critics want a high bar for FBI access to this data and suggest severely restricting FBI's ability to run these searches by requiring a warrant before the search.
Q3: Why is a warrant unnecessary for a search?
A3: Critics of Section 702 suggest that a query of Section 702 data is a "search" under the Fourth Amendment. However, this reading of the law is wrong. The government is not required to obtain a warrant to read information it already lawfully owns. To use a noncommunications analogy, if FBI is investigating a person for tax fraud, they do not need a warrant to get his tax returns from the Internal Revenue Service. Those forms already belong to the government, and they were lawfully obtained. The U.S. Foreign Intelligence Surveillance Court (FISA Court) has held four times that an FBI query of Section 702 is not a separate Fourth Amendment event from the original collection, which was legal. The appeals court upheld those findings.
In addition, the courts have concluded that a "foreign intelligence exception applies to the Fourth Amendment's warrant requirement because (a) the national security purpose behind the surveillance transcends ordinary law enforcement purpose, and (b) there is a high degree of probability that a warrant requirement would hinder the government's ability to collect time-sensitive information impeding vital national security interests."
Separate from being not legally necessary, Section 702 warrants are also impractical. FBI needs probable cause to get a warrant. Probable cause comes when you have evidence of a crime, and FBI only knows that a person might be involved in espionage or terrorism if they find their communications in a Section 702 collection. By that rationale, if FBI collects an email from a known terrorist in Syria, and that Syrian terrorist is emailing a person in California, FBI cannot search for additional communication between the two of them without a warrant. FBI will not get the warrant because an email is not enough to create probable cause. It is an investigative dead end.
The question comes down to weighing which risk is more palatable. This is a hard choice, because information is imperfect and the stakes are high. On the one hand is a risk that an American is being victimized by a malevolent actor or that a terrorist plot is underway. On the other hand is the risk that a number of Americans' privacy rights are infringed upon. But how many? Millions? Thousands? Glenn Gerstell has attempted to deduce a number: In 2025, FBI ran 7,413 queries of Section 702 data. Of those queries, only about a quarter, or around 2,000, actually returned a result. Even if each of those queries was regarding a distinct U.S. person, which is highly unlikely, that means fewer people's emails were exposed to FBI in an entire year than died in one day on 9/11. Gerstell makes the strong argument that "When Congress weighs bolting a deeply questionable warrant requirement onto one of the nation's most important national security statutes, it should keep in mind how many people would potentially be afforded such a 'protection' and what exactly the benefit would be."
Q4: What are some recent enacted reforms to Section 702?
A4: Even the staunchest proponents of Section 702 are still eager to see it comply with the highest ethical standards. After concerns emerged in 2021 that FBI had made mistakes in the administration of the program, the bureau enacted internal reforms to more strictly adhere to requirements. The Reforming Intelligence and Securing America Act (RISAA) codified many of these reforms, piling on top of those enacted in 2018. These were meant to enhance oversight, make it harder for FBI to make mistakes in querying, and train agents extensively on the requirements of the program. Further, RISAA prohibited FBI from querying Section 702 data for criminal purposes only, requiring instead that there be a national security nexus to the crime, and it required an FBI attorney or supervisor to approve every search as narrowly tailored and justified. That justification also needed to be written, for better tracking of trendlines, and after the search, FBI and the Department of Justice (DOJ)'s National Security Division lawyers must audit every search to ensure compliance. Of all the surveillance capabilities in the U.S. government, that is an extraordinary level of oversight and restriction.
Q5: What other reform ideas are out there, and would they work?
A5: Despite the enormous success of the RISAA reforms, some are calling for more. Additional tweaks are harder and harder to come by; much like slicing salami, the cuts can only get so thin before you slice your own finger. Ideas below are big changes that would have a significant downside but would further limit the potential for U.S. persons' information to emerge:
1. Cut FBI out of accessing Section 702 data: This is a nuclear option. It would prevent a law enforcement agency from seeing U.S. persons' data via this collection stream, but it would also severely restrict FBI's ability to disrupt plots or notify victims of cybercrimes. CIA, NSA, and NCTC would maintain their access, but only with their foreign-facing mandate.
2. Order a temporary FBI stand down while Congress commissions a six-month deep dive study: A commission could use congressional oversight power to explore FBI's querying procedures and their requirements for access to the program's data. They could report back and let Congress decide whether further action is warranted.
3. Establish a Blue Ribbon Congressional Commission on a wholly new version of Section 702: RISAA mandated a commission, but none of the commissioners were ever appointed, and the study never occurred. A renewed effort might have a more extensive mandate and resources. It would ask how the United States might build a modern surveillance program that accomplishes much of what Section 702 accomplished, but also takes into account tremendous leaps forward in communications technology.
4. Appoint a Section 702 "librarian" to manage the flow of all information through FBI: This approach would ensure that only true Section 702 experts with full knowledge of the rules can access the data. However, it would slow down FBI's capability to explore connections between foreign threats and U.S. actors. The librarian would ensure that any FBI agent requesting data has followed all necessary procedures and could also be the keeper of the statistics on queries, results, and successful disruptions or notifications. This is only slightly different from the current requirement for lawyer or supervisor approval of a search; it would be one central authority rather than a distributed authority.
5. Restrict FBI searches to victim notification only: Congress could further restrict FBI's searches to one purpose: identifying victims. This would allow searches to determine the scope of a cyber breach or the intent of a foreign intelligence officer seeking to recruit a new asset. Drawing this distinction would likely be difficult in practice.
One counterproductive idea is to identify every U.S. person who has appeared in a Section 702 search. NSA or FBI would need to find every email address or phone number and match it to a specific person, then figure out whether that person is a resident of the United States, likely by identifying where they live. From a relatively anonymous email address in a database, FBI has now dug up a name and an address. This is not a useful exercise--it is a far more massive invasion of privacy than the original search.
This provision of the FISA law has--unnecessarily--become a political issue. Those who continue to push for reform of the program rarely do so because they want to fix it; rather, they want to be a hero to a certain constituency that zealously demands limited government power. What this group does not realize is that Section 702 is already severely restricted. Their time would be better spent on other issues that represent far worse abuses. The Section 702 program offers minimal risk in exchange for maximum national security benefit, with robust oversight established over 18 years. Throwing out that progress would leave the United States vulnerable to both privacy invasions and hostile acts.
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Emily Harding is director of the Intelligence, National Security, and Technology Program and vice president of the Defense and Security Department at the Center for Strategic and International Studies.
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Original text here: https://www.csis.org/analysis/section-702-why-do-we-need-it
[Category: ThinkTank]
CSIS Issues Critical Questions Q&A: How to Interpret Wartime Oil Prices
WASHINGTON, April 25 -- The Center for Strategic and International Studies issued the following Critical Questions Q&A on April 24, 2026, involving non-resident senior associate Adi Imsirovic and senior fellow Clayton Seigle, both of the Energy Security and Climate Change Program.
Seigle is also the James R. Schlesinger Chair in Energy and Geopolitics.
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How to Interpret Wartime Oil Prices
Since the war in Iran started on February 28, oil prices have moved considerably higher as the market has been forced to cope with an unprecedented supply disruption--more than 10 million barrels per
... Show Full Article
WASHINGTON, April 25 -- The Center for Strategic and International Studies issued the following Critical Questions Q&A on April 24, 2026, involving non-resident senior associate Adi Imsirovic and senior fellow Clayton Seigle, both of the Energy Security and Climate Change Program.
Seigle is also the James R. Schlesinger Chair in Energy and Geopolitics.
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How to Interpret Wartime Oil Prices
Since the war in Iran started on February 28, oil prices have moved considerably higher as the market has been forced to cope with an unprecedented supply disruption--more than 10 million barrels perday (mb/d) missing from global markets for more than 50 days. Oil prices have exhibited high volatility during this period, surging on reports of damage to infrastructure and shipping, and receding with news about diplomatic progress toward ending the war. From the outside, it appears that there are two distinct oil markets with separate but related pricing dynamics: the physical oil market and the financial, or "paper," market. This Critical Questions explains the differences and the relationship between them, and suggest that the former is the better gauge of changing supply-demand balances during these extraordinary circumstances.
Q1: What is the difference between "physical" and "paper" oil prices?
A1: Physical oil prices are paid by parties making and taking delivery of real barrels of oil within the next two to four weeks. Those include oil sellers, such as U.S. oil producers and the national oil companies of the Organization of the Petroleum Exporting Countries (OPEC) states, and their consumers, which, for crude oil, are refiners. The most important physical oil price is Dated Brent, which represents the price of North Sea crude oil. Many other types of crude oil, such as Iraq's Basra oil (delivered to Europe) and Russia's Urals crude, are priced with a premium or discount to Dated Brent.
For example, Nigeria's Forcados crude oil recently transacted at around Dated Brent plus $6.5 per barrel, reflecting the specific composition and refinery yield of Forcados as well as its availability, shipping cost, and other factors.
"Paper" oil prices are usually those of financial contracts that reference oil to be delivered in some future month. The two most important "paper" prices are the futures contracts for Brent and for West Texas Intermediate (WTI) that are offered on the Intercontinental Exchange (ICE) and the Chicago Mercantile Exchange (CME). Other types of contracts in the "paper" oil markets are oil options--also offered on the commodity exchanges--and oil swaps, which are largely private bilateral transactions on the "over-the-counter" (OTC) market.
Q2: Who are the participants in these two markets, and how do they use them?
A2: Oil producers, refiners, and middlemen traders are the physical market participants, setting the prices for physical oil transactions. Paper markets, on the other hand, are used for hedging (price risk management) and for proprietary speculative trading. The key difference is that paper market trading rarely involves receiving or delivering physical oil; its financial market participants usually cancel obligations with offsetting contracts prior to expiry, obviating the need for making or taking delivery.
Hedging utilizes paper market contracts to manage risk, which is done by both sellers and buyers. For example, an oil seller faces downside price risk--if oil prices decline in the future, its revenue will too. It can lock in today's prices by selling oil futures as a hedge against that potential price decline. A refiner, on the other hand, faces risk with higher crude prices, so it hedges by buying crude futures contracts.
For refined oil products like gasoline, diesel, and jet fuel, the refiner is the seller, so it hedges against price declines in those fuels while its customers, for example, airlines, face upside price risk and so would hedge against fuel price increases.
Proprietary or speculative trading is akin to betting on price moves based on an investment thesis, usually around an in-house view about oil supply-demand fundamentals.
Q3: What is the typical variance between the two oil prices, and what is unusual about the spread during this crisis?
A3: Physical and futures market prices move in tandem, with typical differences measured in just cents per barrel, converging as futures contracts approach expiry (see Figure 1)
However, under exceptional circumstances such as the current Middle East Gulf export disruption, which has halted more than 10 mb/d, the two prices can diverge substantially. One reason is that refineries are desperate to acquire sufficient crude feedstocks to keep their units running and avoid expensive run cuts or plant shutdowns. Another reason is that many noncommercial traders in the futures markets are wary of downside "headline" risk that can cause financial losses from a single social media post and prefer to stay more neutral than physical traders who require oil on hand. This has likely left traders with a downside price bias with significant influence in paper markets.
In times like these, oil for delivery soon can trade much higher than the futures markets, such as the extraordinary $30 differential recorded in early April.
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Figure 1: Physical (Dated Brent) vs. Paper (ICE Brent Futures)
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Q4: What is this historic variance telling us about the market impact of this crisis?
A4: Unlike the 2007-2008 price escalation, caused by an explosion of demand led by China, the United States is now experiencing a classic 1970s-style supply shock that is poised to leave global inventories depleted, with refineries unable to source enough affordable crude oil and certain regions running short of fuels for transportation and--in some Asian markets--cooking.
Physical and paper markets are both reflecting the historic nature of the current supply disruption--over half a billion barrels so far withheld from world markets--for which no policy response can fully offset. Neither supply-side measures like drawdowns of strategic reserves and the waiver of the U.S. Jones Act regulations, nor demand-side changes to taxes and subsidies, can completely mitigate the economic damage from this disruption.
Market observers are anticipating that oil prices could reach "demand destruction" levels--so high as to cause consumers and businesses to pull back on oil consumption--to rebalance supply and demand. This will occur in the physical oil market, not the futures market. And initial signs indicate this may already be happening, as physical crude prices recently near $150, and prices for jet fuel in Asia above $200, could already be curtailing oil demand relative to prewar patterns.
Q5: What additional policy measures are being undertaken to protect consumers and businesses?
A5: Dozens of governments have announced market interventions, many of them price caps and fuel subsidies, to shield their constituents from runaway energy prices caused by the war. Broad price interventions (rather than steps focused on especially vulnerable cohorts) run the risk of "moral hazard," shielding buyers from market signals needed to change behaviors, thus ultimately exacerbating the crisis. Other steps, like governmental initiatives to reduce electricity use for air conditioning and lighting, are underway in some Asian nations.
Q6: What are the risks for market observers in referencing paper prices at a time like this?
A6: Because physical and paper oil markets usually trade at very similar levels, and because futures prices are published by the exchanges in near real time, affording universal access in news media and online, financial markets and investors have come to believe that futures prices (like front-month Brent and WTI) are the price of oil. But in times like these, paper markets can send a false signal that oil markets are less tight than they really are. Looking at the $98 average front-month Brent futures price since March 1, one might conclude that the price spike has not been too bad, especially since Brent futures hit $139 as recently as March 2022. But the moderate futures prices are masking the much higher prices being paid for physical oil, with Dated Brent having averaged $111 since March 1, and some grades of oil trading more than $20 higher than that.
Q7: Under what conditions will the physical vs. paper price differential resolve, and what will that mean for retail prices of gasoline and diesel, and for jet aviation fuel?
A7: Both physical and paper oil market prices will fluctuate with expectations for Gulf exports to resume, and an eventual restoration of regional supply flows will reduce prices in both categories. But paper markets are likely to sell off harder than physical markets, which will be stuck with disrupted supply chains (shut-in oil wells, insufficient empty tankers to resume prewar volumes) for months after the war ends. As a result, the prices of gasoline, diesel, and jet fuel will stay higher for longer than oil futures.
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Adi Imsirovic, Senior Associate (Non-resident), Energy Security and Climate Change Program
Clayton Seigle is a senior fellow in the Energy Security and Climate Change Program and holds the James R. Schlesinger Chair in Energy and Geopolitics at CSIS.
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Original text here: https://www.csis.org/analysis/how-interpret-wartime-oil-prices
[Category: ThinkTank]
American Action Forum Issues Commentary: Tracker - The Federal Reserve's Balance Sheet Assets
WASHINGTON, April 25 -- The American Action Forum issued the following commentary on April 24, 2026, by Financial Services Policy Director Thomas Kingsley:
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Tracker: The Federal Reserve's Balance Sheet Assets
Introduction
This tracker follows the Federal Reserve's (Fed) total consolidated assets, held on its balance sheet, as the best indicator of the Fed's direct intervention in the economy.
Context
The Fed's dual mandate requires it to ensure both stable prices and maximum employment. The traditional tool the Fed uses to accomplish these goals is the adjustment of the federal funds
... Show Full Article
WASHINGTON, April 25 -- The American Action Forum issued the following commentary on April 24, 2026, by Financial Services Policy Director Thomas Kingsley:
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Tracker: The Federal Reserve's Balance Sheet Assets
Introduction
This tracker follows the Federal Reserve's (Fed) total consolidated assets, held on its balance sheet, as the best indicator of the Fed's direct intervention in the economy.
Context
The Fed's dual mandate requires it to ensure both stable prices and maximum employment. The traditional tool the Fed uses to accomplish these goals is the adjustment of the federal fundsrate, the short-term interest rate that determines how much it costs for banks to lend to each other overnight. The 2007-2008 financial crisis, however, demonstrated that even lowering the interest rate to zero was considered insufficient to shore up economies in freefall, and the Fed turned to more unusual tactics. One of these measures was what the Fed refers to as "large-scale asset purchases," which is more commonly known as "quantitative easing." Under this process, the Fed enters the market to buy securities, typically mortgage-backed securities (MBS) and Treasuries, injecting both capital and liquidity into the market. This approach is not without risks - for the first time in its history, the Fed is regulator, supervisor, and now participant in the economy.
The development of quantitative easing as a go-to tool for the Fed in times of crisis has led to an unprecedented focus on one of its traditionally unremarkable aspects - the Fed total assets. Just as with any other firm, securities that the Fed purchases are considered assets and therefore are represented on the Fed's balance sheet. This therefore is the most reflective guide of the state of quantitative easing and, by extension, the degree to which the Fed has deemed it necessary to intervene in the economy.
Each week, the Federal Reserve publishes its balance sheet, typically on Wednesday afternoon around 4:30 p.m.
As of April 22, the Fed's assets stand at $6.7 trillion, up nearly $2 billion from the prior week but down over $19 billion from a year ago.
Sources:
https://fred.stlouisfed.org/series/WALCL
https://fred.stlouisfed.org/series/TREAST
https://fred.stlouisfed.org/series/WSHOMCB
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Thomas Kingsley is the Director of Financial Services Policy at the American Action Forum.
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Original text here: https://www.americanactionforum.org/insight/tracker-the-federal-reserves-balance-sheet/
[Category: Think Tank]
