Raul B.

For Posterity:

Stephen Miller (guest with Fox News’ Sean Hannity, August 25, 2025): “The Democrat party does not fight for, care about, or represent American citizens. It is an entity devoted exclusively to the defense of hardened criminals, gang bangers, and illegal alien killers and terrorists. The Democrat party is not a political party. It is a domestic extremist organization. Look at Chicago. They’ve shut down the police department. They’ve handcuffed law enforcement. And as President Trump says, they’ve turned the streets of Chicago into a bloody killing field. Here in Washington, D.C., before President Trump launched the federal law enforcement liberation in D.C., there was a murder on the streets of this town every other day. Body after body after body after body. That was Washington, D.C. Residents were afraid to go to restaurants. They were afraid to go into entire neighborhoods. They were getting carjacked right and left, robbed, and beaten. That was Washington, D.C. Now we’re two weeks homicide-free. The safest the city has ever been in its entire history. And the Democrats, instead of jumping up and down and saying ‘thank you President Trump – thank you for saving our lives. Thank you for saving our cities. Thank you for scrubbing away all the graffiti, the trash, the homeless encampments, the druggies. Instead of cleaning up the city, instead of thanking him for that, they’re saying ‘President Trump how dare you save our lives. How dare you save our children. How dare you save our city.’ The Democrat party, Sean, that exists today, it disgusts me. I do not recognize that party, Sean.”

Sean Hannity: “I don’t recognize it. But the reality is you cannot pursue happiness in this country – life, liberty, pursuit of happiness – you can’t pursue happiness if you don’t have the prerequisite of law and order, and safety and security. They are not providing it. Now, my understanding of the supremacy clause – that would then be the jurisdiction of the federal government. Your take?”

Miller: “Absolutely, Sean. First of all, thank you for making this basic point. You can’t have happiness without security first. Look, if your streets are more violent – as these Democrat cities are - more violent than Bagdad; more violent than communities in Ethiopia and places that many Americans would never even dream of visiting. Some of the most dangerous places on planet earth. More dangerous than Mexico City. Democrat cities are more dangerous than Mexico City, which is run my criminal cartels. How can you pursue happiness, Sean? And to the point about the federal government and the supremacy clause, the President has the utmost authority here, because he oversees federal law enforcement – which is supreme to state and local law enforcement. And all of these organized street gangs that are terrorizing these cities, that are dealing these drugs, that are trafficking in weapons, that are engaging in organized theft, armed robbery, carjacking - all of them are doing business with, at some level or another, the transnational narco-trafficking organizations. So, these street crews are engaged in material support for terrorism, which is the core function of the federal government to defend and protect. President Trump has literally set the people of Washington, D.C. free. They’re so happy now. They can just go out and live their lives – go their favorite restaurant; go to their favorite bar; go to the favorite pool hall; go to the favorite park. You see moms taking kids out to parks they haven’t been to in years. Because they know the police are there. They know President Trump is there with his law enforcement to protect them. It’s a thing of beauty, Sean. But I would say to the mayor of all these Democrat cities, like Chicago, what you are doing to your own citizens is evil. Subjecting your own citizens to this constant bloodbath and then rejoicing in it – is evil. And you should praise God every single day that President Trump is in the White House.”

Stephen Miller is a senior White House advisor and strategist, the nerve center for President Trump’s inner sanctum – a MAGA mastermind. A voice in my mind is saying disengage with the keyboard. A louder voice demands mirror check time. If that’s not fascism, what the f is it?

August 22 – Slipped Disc (Norman Lebrecht): “The Utah conductor Robert Baldwin – music director of Salt Lake Symphony and Professor of Music at University of Utah – has issued an appeal for the release of his former concertmaster John Shin, who is being held in a grim ICE detention center. Baldwin writes: My former student, John Shin, has been detained by ICE. We need to be better than this, America! When these raids and roundups began in January, we were told it would only be the violent criminals, murderers, and such. Well, here’s a former student and upstanding human being, a husband, father, and fabulous musician. He’s been here nearly his entire life. He is married to a US citizen. He has two degrees in violin performance from the U. He played concertmaster in both the Campus Symphony, the Utah Philharmonia, and graduate string quartet, all leadership roles. He has enriched the musical community after graduating, too, playing in the Salt Lake Symphony and Sinfonia Salt Lake, among others. I have relied on him as a valued member of those ensembles as have others. Now, I don’t know. Maybe he has some parking tickets. Maybe he has a moving violation. BUT I’ve never known John to be anything but a dedicated, respectful human being. He was rounded up, detained, and only given a short phone call.”

For the Week:

The S&P500 was little changed (up 9.8% y-t-d), while the Dow slipped 0.2% (up 7.1%). The Utilities dropped 2.5% (up 10.7%). The Banks rose 1.9% (up 18.3%), and the Broker/Dealers added 0.2% (up 30.0%). The Transports retreated 1.2% (unchanged). The S&P 400 Midcaps were about unchanged (up 4.3%), while the small cap Russell 2000 increased 0.2% (up 6.1%). The Nasdaq100 slipped 0.4% (up 11.4%). The Semiconductors declined 1.5% (up 13.8%). The Biotechs lost 1.6% (up 4.0%). With bullion jumping $76, the HUI gold index surged 5.3% (up 87.1%).

Three-month Treasury bill rates ended the week at 4.042%. Two-year government yields dropped eight bps to 3.62% (down 62bps y-t-d). Five-year T-note yields fell six bps to 3.70% (down 69bps). Ten-year Treasury yields dipped three bps to 4.23% (down 34bps). Long bond yields rose five bps to 4.93% (up 15bps). Benchmark Fannie Mae MBS yields were down five bps to 5.33% (down 51bps).

Italian 10-year yields rose six bps to 3.59% (up 7bps y-t-d). Greek 10-year yields gained five bps to 3.41% (up 20bps). Spain's 10-year yields increased five bps to 3.33% (up 27bps). German bund yields were unchanged at 2.72% (up 36bps). French yields jumped nine bps to 3.51% (up 32bps). The French to German 10-year bond spread widened nine to 79 bps. U.K. 10-year gilt yields added three bps to 4.72% (up 15bps). U.K.'s FTSE equities index declined 1.4% (up 12.4% y-t-d).

Japan's Nikkei 225 Equities Index added 0.2% (up 7.1% y-t-d). Japanese 10-year "JGB" yields slipped two bps to 1.60% (up 50bps y-t-d). France's CAC40 sank 3.3% (up 4.4%). The German DAX equities index fell 1.9% (up 20.1%). Spain's IBEX 35 equities index slumped 3.0% (up 28.8%). Italy's FTSE MIB index dropped 2.6% (up 23.4%). EM equities were mixed. Brazil's Bovespa index rose 2.5% (up 17.6%), while Mexico's Bolsa index declined 0.9% (up 18.6%). South Korea's Kospi increased 0.5% (up 32.8%). India's Sensex equities index fell 1.8% (up 1.7%). China's Shanghai Exchange Index added 0.8% (up 15.1%). Turkey's Borsa Istanbul National 100 index dipped 0.7% (up 14.8%).

Federal Reserve Credit declined $11.9 billion last week to $6.565 TN. Fed Credit was down $2.324 TN from the June 22, 2022, peak. Over the past 311 weeks, Fed Credit expanded $2.839 TN, or 76%. Fed Credit inflated $3.754 TN, or 134%, over the past 668 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt dipped $0.7 billion last week at $3.166 TN - the low back to February 2017. "Custody holdings" were down $135 billion y-o-y, or 4.1%.

Total money market fund assets jumped $17.2 billion to a record $7.207 TN. Money funds were up $965 billion, or 15.5%, y-o-y.

Total Commercial Paper added $0.6 billion to $1.405 TN. CP has expanded $317 billion y-t-d and $169 billion, or 13.7%, y-o-y.

Freddie Mac 30-year fixed mortgage rates slipped two bps to 6.56% (up 21bps y-o-y). Fifteen-year rates were unchanged at 5.69% (up 18bps). Bankrate's survey of jumbo mortgage borrowing costs had 30-year fixed rates down four bps to 6.68% (down 17bps).

Currency Watch:

August 24 – Bloomberg (Masaki Kondo): “The premium the dollar commands in currency derivatives is nearly gone, an indication that foreign demand for US debt is weakening. The dollar’s weighted-average three-month basis against five major peers, which reflects the premium or discount investors accept to borrow one currency against another, is just below three bps… It is now on track to turn negative for the first time since August 2020. The cross-currency basis market gauges how much it costs to exchange one currency for another beyond what is implied by borrowing costs in the cash markets. The basis effectively sets the price of foreign-exchange hedging for global investors; it’s also an indication of flows between economies and asset classes.”

For the week, the U.S. Dollar Index was little changed at 97.771 (down 9.9% y-t-d). For the week on the upside, the Australian dollar increased 0.8%, the Canadian dollar 0.6%, the New Zealand dollar 0.5%, the Swedish krona 0.7%, and the Swiss franc 0.1%. On the downside, the South African rand declined 1.2%, the South Korean won 0.5%, the Mexican peso 0.4%, the euro 0.3%, the Singapore dollar 0.2%, the British pound 0.2%, the Japanese yen 0.1%, and the Brazilian real 0.1%. The Chinese (onshore) renminbi gained 0.51% versus the dollar (up 2.36% y-t-d).

Commodities Watch:

The Bloomberg Commodities Index gained 1.1% (up 4.1% y-t-d). Spot Gold jumped 2.3% to $3,448 (up 31.4%). Silver gained 2.1% to $39.7189 (up 37.4%). WTI crude increased 35 cents, or 0.5%, to $64.01 (down 11%). Gasoline declined 1.2% (down 3%), while Natural Gas rallied 7.0% to $2.997 (down 17%). Copper added 1.4% (up 14%). Wheat rallied 1.3% (down 3%), and Corn gained 2.2% (down 8%). Bitcoin sank $7,700, or 6.6%, to $108,300 (up 15.5%).

Market Instability Watch:

August 25 – Financial Times (Leila Abboud): “France’s Prime Minister François Bayrou will ask parliament to back his strategy for cutting the country’s public deficit in an unexpected vote on September 8, putting his premiership on the line as opposition hardens against him. Bayrou said he would put a confidence vote to lawmakers during an extraordinary session of parliament to force them to take a position on what he said were ‘urgent and indispensable’ measures to repair France’s degraded public finances. ‘If no agreement is possible, then I consider that action is impossible and unattainable,’ Bayrou said… ‘If you have a majority, the government is confirmed. If you don’t have a majority, the government falls,’ he explained, believing that the ‘biggest’ risk would have been to do nothing.”

August 26 – Bloomberg (James Hirai and Greg Ritchie): “UK long bond yields soared to within a whisker of a 27-year high Tuesday, piling pressure on Prime Minister Keir Starmer’s government to rein in its fiscal stance. The yield on 30-year bonds surged as much as nine basis points to 5.63%... A move to 5.66% would be the highest since 1998.”

August 29 – Bloomberg (Ye Xie): “The US Treasury market stayed relatively calm this week despite Donald Trump’s mounting attacks on the Federal Reserve, but a further rise in inflation expectations is one sign of growing investor angst over the president’s effort to shape the central bank. The 10-year breakeven rate – or the yield difference between Treasuries and inflation-linked bonds — reached a six-month high of 2.46% Wednesday, before slipping back to 2.41% by Friday. The move was driven by a decline in yields on the inflation-protected securities — or TIPS — which fell to a four-month low of 1.81%, as demand for hedges increased.”

August 26 – Bloomberg (Naomi Tajitsu): “A ‘Goldilocks summer’ is all but over, according to Goldman Sachs…, and mounting concern about the US economy is yanking markets from their seasonal slumber. As they come back to their desks, investors will be confronted by tepid US data prints, concern about US trade tariffs and President Donald Trump’s latest broadsides against the Federal Reserve, according to strategists at Goldman and Deutsche Bank AG. ‘It will be quite a difficult return,’ said Christian Mueller-Glissmann, head of asset allocation research at Goldman…‘I’m not sure that we can sustain that type of Goldilocks momentum we’ve had.’

August 27 – Bloomberg (Maria Eloisa Capurro): “As Donald Trump ramps up efforts to control the Federal Reserve, investors worry he’ll use central bank tools to fix something that’s not supposed to be a central bank problem: America’s ballooning debt bills. Trump said… he’s ready for a legal fight over his attempt to oust Fed Governor Lisa Cook, and looking forward to having a ‘majority’ on the central bank’s board. That could advance the president’s campaign for lower interest rates, which he says will save the country ‘hundreds of billions.’ There are two main reasons why the government’s debt costs have soared lately: bigger budget deficits and higher rates. At least one of them will have to go into reverse if the bill is to come back down. But most economists say the solution lies in borrowing less, via some combination of lower spending and higher taxes — rather than leaning on the Fed to make borrowing cheaper. The latter path is a dangerous one for central bankers whose goal is to keep a lid on inflation.”

August 27 – Bloomberg (Ye Xie): “Citigroup Inc.’s strategists recommended adding to bets that longer-term US bonds will underperform and the dollar will decline due to the risk that President Donald Trump will undermine the Federal Reserve’s political independence… ‘Fears of a weakening of the Fed’s independence has two main market release valves in our view: weaker USD and steeper curve,’ the strategists wrote…”
August 29 – Bloomberg: “China’s stock market is heading for a record turnover this month, underscoring the intensity of a bull run that’s bringing in more investors by the day. The average turnover volume so far this month is 2.2 trillion yuan ($309bn), beating the previous high of 2 trillion yuan set in October… The onshore benchmark CSI 300 Index is up nearly 10% this month, making it one of the world’s best performers.”

Global Credit and Financial Bubble Watch:

August 28 – Associated Press (Greg Ritchie, Tasos Vossos, and Caleb Mutua): “Bond investors are accepting the smallest compensation in years in return for taking default risk, as a potent combination of economic optimism and too much cash chasing too few securities skews costs. Credit spreads… are grinding lower across the world. That’s as muted financial volatility encourages investors to seek assets offering greater carry, ranging from company debt to emerging-market currencies. The extra interest paid by investment-grade companies in US dollars is around the lowest level since before the dot-com bubble burst. The riskiest type of bank bonds have rarely been so expensive. A handful of borrowers are even trading at lower yields than Treasuries…”

August 29 – Bloomberg (Patrick Clark and Prashant Gopal): “Private mortgage lenders with the backing of Wall Street’s biggest names are facing an unsettling reality: Their breakneck growth has made them increasingly vulnerable. Armed with capital from firms like KKR & Co., Apollo Global Management Inc.’s Athene and Singapore’s Temasek, lenders to home flippers and small-time real estate investors have cranked up originations in recent years. What was once an industry backwater churned out nearly $140 billion in debt last year and looks primed for another annual record. But faults in the system are emerging. In Baltimore, a spate of what one lender called ‘overinflated property valuations’ has spurred some to slow down originations or halt them in the city entirely.”

August 25 – Bloomberg (Finbarr Flynn): “More Asian borrowers are considering bond offerings, extending a stretch of sales that’s already jumped to the most since 2021 at $306 billion-equivalent across dollars and euros this year.”

Trump Administration Watch:

August 26 – Wall Street Journal (Matt Grossman and Greg Ip): “President Trump’s attempt to fire Federal Reserve governor Lisa Cook is the most dramatic step yet in his effort to take control of the independent central bank and its vast authority over interest rates… ‘To the extent that Fed independence stands for anything, it stands for the idea that monetary policy should not be made by the whims of the sitting president,’ Peter Conti-Brown, a financial and legal scholar at the University of Pennsylvania, said… ‘If we allow this to become the norm, then this is the end of Federal Reserve independence as we know it.’”

August 27 – New York Times (Adam Liptak): “President Trump’s attempt to fire Lisa Cook, a Federal Reserve governor, signaled a shift in tactics that appeared tailored to that body’s special legal status. Whether it succeeds will turn on the meaning of a two-word phrase: ‘for cause.’ In removing the leaders of other independent agencies, Mr. Trump has given no reasons, saying he has the unilateral constitutional authority to control the executive branch, even in the face of congressional efforts to shield officials from political interference. The Supreme Court has lately sided with that view, rejecting statutes that have been on the books for decades requiring presidents to supply a reason for removing officials. But with the Fed, Mr. Trump has tried something new. This time, he explained in a letter to Ms. Cook on Monday, there was ‘sufficient cause’ to remove her.”

August 27 – Wall Street Journal (Josh Dawsey and Annie Linskey): “Some aides to Donald Trump warned the president that building a ballroom at the White House would force them to tear down part of the East Wing and disrupt daily operations and tours… Trump said he would build it anyway, and the contract was given to builders chosen by the White House. In his first term, administration officials regularly curbed Trump’s impulses on matters big and small, including on tariffs, immigration and controlling the Federal Reserve. In his second, Trump has been surrounded by fewer people who try to dissuade him, according to White House officials, Trump allies and observers of the presidency. ‘I think he’s learned there is not much that can really stop him from what he wants,’ said Marc Short, who was Trump’s director of legislative affairs in his first term.”

August 25 – Donald Trump: “I PAID ZERO FOR INTEL, IT IS WORTH APPROXIMATELY 11 BILLION DOLLARS. All goes to the USA. Why are ‘stupid’ people unhappy with that? I will make deals like that for our Country all day long. I will also help those companies that make such lucrative deals with the United States States. I love seeing their stock price go up, making the USA RICHER, AND RICHER. More jobs for America!!! Who would not want to make deals like that?”

August 26 – Axios (Ben Berkowitz): “To President Trump’s many roles, formal and self-designated, add a new one to the list: chairman of all boards. The president has assumed a quasi-authority to orchestrate how the private sector operates, both broadly and down to the management and ownership of individual companies. No one’s stopping him, so he continues to confidently plow ahead. Those with insight into his strategy say it’s anything but arbitrary — there’s a mold-breaking calculus at play, they say, centered on national security and American competitiveness. The director of the National Economic Council, Kevin Hassett, told CNBC… the government’s new stake in Intel was a ‘down payment’ on the creation of a sovereign wealth fund, adding it was ‘absolutely right’ that Trump would seek more such investments. Trump told reporters yesterday ‘I want to try and get as much as I can.’ He later added: ‘I hope I'm going to have many more cases like it.’”

August 27 – Associated Press (Bernard Condon): “Donald Trump has a message for critics who think turning the U.S. government into a major stockholder of Intel is a ‘socialist’ move: More is coming. ‘I will make deals like that for our Country all day long,’ the president posted… after critics piled on, adding later about future ownership stakes, ‘I want to try and get as much as I can.’ One possible target: defense contractors, whom Commerce Secretary Howard Lutnick told CNBC… were ripe for the picking… Free-market conservatives were already wary of Trump’s tendency to interfere in corporate decision-making by, for example, telling Apple where it should make iPhones, or even demanding a cut of Nvidia’s sales of chips to China. But the Intel move is a startling defiance of Republican orthodoxy that says governments shouldn’t try to pick corporate winners and losers and risk messing things up as owners by rewarding executives for politically smart but financially stupid decisions.”

August 25 – CNBC (Jeff Cox): “President Donald Trump… boasted about the government’s new stake in Intel and said he’s determined to do similar deals. ‘I will make deals like that for our Country all day long,’ the president posted… Trump added that ‘stupid people’ are upset with a move that he said will bring more money and jobs to the U.S. ‘I will also help those companies that make such lucrative deals with the United States. ... I love seeing their stock price go up, making the USA RICHER, AND RICHER… More jobs for America!!! Who would not want to make deals like that?’”

August 25 – Axios (Ben Berkowitz): “The U.S. government is likely to take ownership stakes in more companies — just as it did with Intel — toward the goal of building a sovereign wealth fund, National Economic Council director Kevin Hassett said… It’s a new paradigm for the U.S. government’s relationship with the private sector, and raises fresh questions about how much authority the administration intends to exert over corporate America. Last week, the government said it would take a nearly 10% position in Intel, in exchange for grants previously awarded to the chipmaker. Hassett… referred to that investment as a ‘down payment’ on the creation of a sovereign wealth fund… ‘The president has made it clear, all the way back to the campaign, that he thinks that, in the end, it would be great if the U.S. could start to build up a sovereign wealth fund. And, so, I’m sure that at some point there'll be more transactions, if not in this industry, then in other industries,’ Hassett said. Hassett went on to say it was ‘absolutely right’ that the government could seek stakes in more companies.”

August 28 – Bloomberg (Jessica Nix and Damian Garde): “US Health and Human Services Secretary Robert F. Kennedy Jr. said the Centers for Disease Control and Prevention isn’t sufficiently aligned with President Donald Trump’s agenda and it needs an overhaul, a day after the White House fired the director following an intense clash over vaccines. The agency has made numerous critical errors and is likely suffering from a ‘deeply embedded malaise,’ Kennedy said…, adding that he’s ‘not surprised’ over the current staff upheaval at the CDC.”

August 26 – Associated Press (Chris Megerian, Brian Slodysko and Fatima Hussein): “When Bill Pulte was nominated as the country’s top housing regulator, he told senators that his ‘number one mission will be to strengthen and safeguard the housing finance system.’ But since he started the job, he’s distinguished himself by targeting President Donald Trump ‘s political enemies. He’s using property records to make accusations of mortgage fraud and encourage criminal investigations, wielding an obscure position to serve as a presidential enforcer. This week, Trump used allegations publicized by Pulte in an attempt to fire Lisa Cook, a member of the Federal Reserve board, as he tries to exert more control over the traditionally independent central bank.”

August 27 – Financial Times (Steff Chávez and Michael Stott): “The Pentagon is deploying warships to waters around Central and South America, an unusually large naval build-up that has stoked tensions with Venezuela and other Latin American countries. The US Navy has sent at least seven vessels, including three guided-missile destroyers, an amphibious assault ship and a guided-missile cruiser… A nuclear-powered fast attack submarine has also been deployed… The Trump administration has billed the move, which involves thousands of sailors and marines, as part of its efforts to combat drug trafficking by cartels. The White House has used increasingly hostile rhetoric about Venezuela’s President Nicolás Maduro, referring to him as ‘illegal’ and accusing him of trafficking drugs.”

August 25 – Axios (Josephine Walker): “President Trump called his comments questioning South Korea’s political stability a ‘misunderstanding’ on Monday after President Lee Jae Myung explained that a special prosecutor investigating the recent coup attempt in the country conducted a raid confined to the Korean side of a base operated jointly with the U.S. The president’s initial comments shocked South Korean officials ahead of the two presidents meeting… ‘WHAT IS GOING ON IN SOUTH KOREA?’ Trump posted hours before meeting Lee… ‘Seems like a Purge or Revolution,’ he continued. ‘We can’t have that and do business there.’”

China Trade War Watch:

August 27 – Financial Times (Zijing Wu): “China’s chipmakers are seeking to triple the country’s total output of artificial intelligence processors next year, as Beijing races the US to develop the most advanced AI. One fabrication plant dedicated to producing Huawei’s AI processors is scheduled to start production as soon as the end of this year, while two more are due to launch next year… While the new plants are designed to specifically support Huawei, it is not clear who exactly owns them… Chinese companies are also racing to develop the next generation of AI chips adaptable to a standard advocated for by DeepSeek, which has emerged as the country’s leading AI start-up.”

August 26 – Bloomberg: “President Donald Trump said the US has more leverage over China on trade than the other way around, citing airplane parts as a key item Washington has to counter Beijing’s restrictions on rare earths. ‘We have much bigger and better cards than they do,’ he said... ‘If I played those cards, that would destroy China. I’m not going to play those cards… ‘We’re heavy into the world of magnets now, only from a national security standpoint… But we have a powerful thing. It’s airplane parts and many Boeing jets.’”

August 27 – Bloomberg (Shuli Ren): “A new China-buys-China narrative is taking shape as Beijing steps up its tech rivalry with the US. The world’s second-largest economy not only wants to build generative AI models, but power them with its own hardware, redrawing a supply chain dominated by Nvidia Corp… Last week, DeepSeek released an upgrade to its flagship V3 model to accommodate the next generation of homegrown chips. Nvidia still dominates the supply chain with chips essential for the complicated work of training AI models. But as the industry evolves, a bigger market is in selling chips used for inference, which creates responses from pre-trained models and produces texts as well as images for people who use generative AI tools.”

Trade War Watch:

August 25 – CNBC (Kevin Breuninger): “President Donald Trump vowed… to impose ‘substantial’ new tariffs and restrict U.S. chip exports for all countries that do not remove digital taxes and related regulations. Trump wrote… that digital services taxes, or DSTs -- which are currently imposed by dozens of countries – ‘are all designed to harm, or discriminate against, American Technology.’ ‘I put all Countries with Digital Taxes, Legislation, Rules, or Regulations, on notice that unless these discriminatory actions are removed, I… will impose substantial additional Tariffs on that Country’s Exports to the U.S.A.’… ‘Show respect to America and our amazing Tech Companies or, consider the consequences!’ Trump wrote.”

August 26 – New York Times (River Akira Davis): “The United States and Japan will announce details of their trade deal later this week, a pact that calls on the Japanese government to make $550 billion in investment available to be directed by President Trump, Commerce Secretary Howard Lutnick said… Japan agreed to the investment, which it said would be financed through government-backed loans and guarantees… In exchange, the Trump administration agreed to a 15% tariff on Japanese imports, a rate lower than it had previously threatened... Mr. Lutnick… said the agreement would call for the Japanese money to be ‘at the hand of Donald Trump, and he can go invest it’ in areas that are important to American economic security such as rare earth minerals, semiconductors and antibiotic drugs. The comments by Mr. Lutnick reiterated the Trump administration’s claim that it will have final say over what kind of projects Japan’s pledged spending will fund. Mr. Trump has also said the United States will receive virtually all the profits from those investments.”

August 26 – Politico (Elena Giordano): “The European Commission… defended the bloc’s right to set and enforce its own tech rules, after U.S. President Donald Trump threatened to impose new tariffs on countries with digital policies he considers ‘discriminatory.’ ‘It is the sovereign right of the EU and its member states to regulate economic activities on our territory, which are consistent with our democratic values,’ European Commission spokesperson Paula Pinho said…”

August 26 – Bloomberg (Shruti Srivastava and Dan Strumpf): “President Donald Trump imposed a crushing 50% tariff on Indian goods to punish the country for buying Russian oil, upending a decades-long push by Washington to forge closer ties with New Delhi. The new tariffs, the highest in Asia, took effect at 12:01 a.m. in Washington on Wednesday, doubling the existing 25% duty on Indian exports. The levies will hit more than 55% of goods shipped to the US — India’s biggest market — and hurt labor-intensive industries like textiles and jewelry the most. Key exports like electronics and pharmaceuticals are exempt, sparing Apple Inc.’s massive new factory investments in India for now.”

August 23 – Reuters (Alicia Diaz): “Congressional Republicans are embracing Donald Trump’s tariff campaign as a way to advance home-state causes, lobbying the president to impose more import duties to protect local companies. The rank-and-file GOP lawmakers’ entreaties, which often present trade actions shoring up favored manufacturers as a winning tactic for midterm elections, bolster the political case for broadening US tariffs… More than a dozen Republican lawmakers have pushed for fresh or higher tariffs to protect local industries. Several of the lawmakers said Trump granted their requests or said White House officials signaled they would approve the asks.”

August 28 – Bloomberg (Daniel Carvalho and Martha Viotti Beck): “Brazil launched a process to explore retaliatory measures against the 50% tariffs Donald Trump imposed, although President Luiz Inacio Lula da Silva emphasized that he’s still seeking negotiations with the US. Lula authorized the start of a 30-day review of the effects of the higher US levies on a variety of Brazilian goods, followed by a government examination of potential countermeasures.”

August 25 – Reuters (Joyce Lee): “South Korean companies will invest around $150 billion in the United States, Yonhap news agency reported…, citing Ryu Jin, chairman of the business group Federation of Korean Industries.”

August 26 – Reuters (David Shepardson and Joyce Lee): “South Korean President Lee Jae Myung leaned on promises to ‘Make American Shipbuilding Great Again’ during his first official U.S. trip, as the two allies wrangle over other details of their trade and security agreements… Under a South Korean pledge to inject $350 billion into U.S. projects, shipbuilding has emerged as one of the most concrete areas of investment, with $150 billion earmarked for the sector.”

Constitution Watch:

August 26 – Wall Street Journal (Joe Barrett, Vera Bergengruen and John McCormick): “Illinois Democratic Gov. JB Pritzker promised to challenge President Trump’s plan to deploy the National Guard to the nation’s third-largest city, calling the move unconstitutional and un-American. The clash highlighted the rocky path Trump faces in trying to expand his troop rollout into more blue cities. ‘The state of Illinois is ready to stand against this military deployment with every peaceful tool we have,’ Pritzker… said... ‘We will see the Trump administration in court.’ Trump has long painted many of the country’s biggest cities as hellscapes of lawlessness, blaming the Democrats who run them. He described Los Angeles as being ‘invaded and occupied by illegal aliens and criminals’ and said Washington, D.C., was ‘overtaken by violent gangs and bloodthirsty criminals.’ His comments about Chicago, for years, have been particularly barbed. ‘Chicago is a killing field right now,’ Trump told reporters…”

August 28 – Bloomberg (Jennifer A Dlouhy and Miranda Davis): “The White House is discussing the use of a naval base north of Chicago to conduct immigration operations, a move that’s put city officials on alert days after President Donald Trump’s threat to expand federal deployments beyond Washington. Border czar Tom Homan said the matter ‘was still being discussed,’ when asked… how the Department of Homeland Security might use Naval Station Great Lakes… He added that a ‘large contingent’ of federal officials would be deployed in Chicago but declined to provide specifics.”

August 28 – CBS (Sara Tenenbaum): “The Trump administration is preparing to launch major immigration enforcement operations in Chicago next week employing tactics that sparked protests in Los Angeles, sources tell CBS News. Two senior DHS officials confirmed the administration is preparing to expand immigration arrest operations mirroring the activations in Los Angeles in the spring. The operations could start as soon as Sept. 5... The operations in Los Angeles included armored vehicles, tactical gear and weaponry. Sources say the same tactics are expected to be deployed in Chicago.”

August 23 – Reuters (David Shepardson, Ismail Shakil and Idrees Ali): “The Pentagon is working on plans to deploy the U.S. military to Chicago as President Donald Trump says he is cracking down on crime, homelessness and undocumented immigration, the Washington Post reported… The Defense Department planning, in the works for weeks, involves several options, including mobilizing at least a few thousand members of the National Guard as soon as September…”

August 24 – Wall Street Journal (Alyssa Lukpat): “President Trump escalated a feud with Democratic Maryland Gov. Wes Moore, a possible 2028 presidential contender, as the two traded barbs over law enforcement in Baltimore and the president’s Vietnam War-era draft deferment. Trump criticized Moore over what he called ‘out of control, crime ridden, Baltimore’ … after Moore had invited the president to walk the streets of his state. ‘I would much prefer that he clean up this Crime disaster before I go there,’ Trump said, and floated the idea of sending the National Guard to the streets of Baltimore… The president also threatened to claw back funding approved by Congress for replacing Baltimore’s collapsed Francis Scott Key bridge.”

August 28 – Wall Street Journal (Editorial Board): “President Trump is weaponizing his federal housing regulator against political opponents, but does he think only Democrats fudge on mortgage applications? Now come reports that Texas Attorney General Ken Paxton may have done so too. If mortgage misrepresentations are this common, it’s an indictment of Fannie Mae and Freddie Mac. Federal Housing Finance Agency (FHFA) director Bill Pulte appears to be digging through the mortgage records of Mr. Trump’s enemies. Mr. Pulte has access to these files because he oversees Fannie and Freddie, which combined guarantee about half of single-family mortgages. If Mr. Pulte can flyspeck mortgage inaccuracies, why didn’t lenders or the two government-sponsored enterprises (GSEs) he regulates?”

August 24 – Bloomberg (Swati Pandey): “US President Donald Trump berated NBC and ABC as ‘two of the worst and most biased networks in history,’ adding he’d support the FCC in revoking licenses to their television stations. The networks ‘give me 97% BAD STORIES,’ Trump said…, ‘despite a very high popularity and, according to many, among the greatest 8 months in Presidential History.’ ‘IF THAT IS THE CASE, THEY ARE SIMPLY AN ARM OF THE DEMOCRAT PARTY AND SHOULD, ACCORDING TO MANY, HAVE THEIR LICENSES REVOKED BY THE FCC… I would be totally in favor of that because they are so biased and untruthful, an actual threat to our Democracy!!!”

August 26 – Bloomberg (Kelcee Griffis): “President Donald Trump on Aug. 24 suggested that the TV networks NBC and ABC should lose their permission to broadcast due to coverage that he says is unfair to him. It’s not the first time the president has made such an argument. National television networks such as the ones Trump singled out don’t have or need government-issued licenses to operate. Individual TV stations, which pay fees to become affiliates of the national networks, do. It’s extraordinarily unusual for them to lose those permits.”

August 27 – Financial Times (Joe Miller): “Donald Trump has called for billionaire progressive donor George Soros to face racketeering and corruption charges for supposedly supporting ‘violent protests’ across the US. In a post on his social media platform on Wednesday, Trump claimed the 95-year-old Soros and his ‘radical left’ son Alex, who leads the family’s philanthropic foundation, ‘should be charged with RICO’, referring to a statute usually used to combat organised crime. ‘We’re not going to allow these lunatics to rip apart America any more, never giving it so much as a chance to ‘BREATHE,’ and be FREE,’ Trump wrote… ‘Soros, and his group of psychopaths, have caused great damage to our Country!’ he added. ‘That includes his Crazy, West Coast friends. Be careful, we’re watching you!’”

August 25 – Washington Post (Patrick Svitek): “President Donald Trump is threatening a new investigation of former New Jersey governor Chris Christie (R) over a years-old scandal after a television appearance in which Christie was critical of Trump. Writing in a social media post…, Trump referenced the ‘Bridgegate’ scandal that started in 2013 in New Jersey, in which top Christie aides ordered lane closures on the George Washington Bridge into Manhattan, creating days of traffic jams, to retaliate against a mayor who had not backed Christie for reelection. Christie himself was never charged. ‘Chris refused to take responsibility for these criminal acts,’ Trump wrote on his Truth Social network. ‘For the sake of JUSTICE, perhaps we should start looking at that very serious situation again? NO ONE IS ABOVE THE LAW!’”

August 25 – CNBC (Brian Sozzi and Francisco Velasquez): “Former Treasury Secretary Larry Summers said the political pressures and personal attacks targeting Federal Reserve Governor Lisa Cook are unprecedented — and it should alarm anyone concerned about the independence of US institutions. ‘I have to say that the use of prosecution of one's adversaries, whether it’s the FBI visit to John Bolton’s home or whether it is the kind of attack that has been launched on Lisa Cook, is, I think, something that should be chilling to many Americans… If there’s a norm that all kinds of pressure tactics are legal, including bringing the power of law enforcement and investigation and demands for resignation to bear… if that becomes the new norm in American politics ... [that] is a very profound threat,’ he said.”

U.S./Russia/China/Europe/Iran Watch:

August 26 – Bloomberg (Jennifer A Dlouhy and Annmarie Hordern): “US President Donald Trump warned of ‘an economic war’ if he cannot get Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelenskiy to end their conflict, saying he had ‘very serious’ consequences in mind if the fighting continues. ‘It will not be a world war, but it’ll be an economic war, and an economic war is going to be bad. It’s going to be bad for Russia, and I don’t want that,’ Trump said…”

August 28 – Reuters (Gleb Bryanski, Darya Korsunskaya, Elena Fabrichnaya and Gleb Stolyarov): “Russia-China trade, which soared to record levels as the war in Ukraine left Moscow isolated, is now falling, a trend President Vladimir Putin is seeking to reverse as he prepares for a summit with President Xi Jinping, three Russian sources said… ‘Ahead of the visit, officials on both sides are looking into ways to increase trade because the current numbers do not look good,’ said one person involved in preparations for Putin’s trip…”

August 25 – Wall Street Journal (Yaroslav Trofimov and Georgi Kantchev): “The late Sen. John McCain once called Russia ‘a gas station with nukes.’ Now, because of Ukrainian attacks, it must ration fuel. The intensifying Ukrainian drone campaign against Russian refineries has taken some 13% of Russia’s fuel production offline… Sanctions imposed by the West after the 2022 invasion, meanwhile, have limited Moscow’s ability to repair infrastructure and service remaining installations. At the same time, the now frequent disruptions by Ukrainian drones to Russia’s rail networks and airports have forced more Russians to travel by road during their summer holidays… As a result, several regions… have implemented rationing at gas stations. Where gas is available, it is much more expensive…”

New World Order Watch:

August 28 – Bloomberg: “Russian President Vladimir Putin has a rare opportunity to meet with his two most important energy partners this weekend, at a time when he needs something from both. Ensuring India’s Narendra Modi is willing to maintain a healthy level of Russian crude imports, despite growing US pressure, will be high on Putin’s agenda. His second undertaking will likely be to get Chinese leader Xi Jinping to play his part, including by unblocking a long-mooted gas pipeline that would help Moscow replace more of its sales to Europe. The Shanghai Cooperation Organization summit that begins on Sunday in the port city of Tianjin will bring together leaders from more than a dozen countries. It’ll also be Putin, Modi and Xi’s first get-together since a summit in Russia last year.”

August 26 – Associated Press (Matthew Lee): “Denmark’s foreign minister summoned the top U.S. diplomat in the country for talks after the main national broadcaster reported… at least three people with connections to President Donald Trump have been carrying out covert influence operations in Greenland…”

Ukraine Watch:

August 28 – Associated Press (Hanna Arhirova and Samya Kullab): “Russia launched a major air attack on Kyiv early on Thursday that included a rare strike on the center of Ukraine’s capital, killing at least 21 people, wounding 48 and damaging European Union diplomatic offices… The bombardment of drones and missiles was the first major Russian attack on Kyiv in weeks as U.S.-led peace efforts to end the three-year war struggled to gain traction. Britain said the attack sabotaged peace efforts, while top EU diplomat Kaja Kallas summoned Russia’s EU envoy to Brussels over the strikes that damaged EU offices.”

Middle East Watch:

August 24 – Reuters (Elwely Elwelly): “Iran's supreme leader said the current situation with the United States was ‘unsolvable’, and that Tehran would never bow to pressure to obey Washington, amid a standoff with Western powers over its nuclear programme… The Islamic Republic suspended nuclear negotiations with the United States after the U.S. and Israel bombed its nuclear sites during a 12-day war in June… ‘They want Iran to be obedient to America. The Iranian nation will stand with all of its power against those who have such erroneous expectations,’ Ayatollah Ali Khamenei was reported as saying.”

Taiwan Watch:

August 29 – Reuters (Fabian Hamacher): “Taiwan has the right to be free and ‘preserve self-determination’, U.S. Senator Roger Wicker, chairman of the Armed Services Committee and one of the strongest advocates for Taiwan in the U.S. Congress, told the island's president… Wicker, a Republican, told Taiwan President Lai Ching-te during a meeting at the presidential office in Taipei that he and his colleague, Senator Deb Fischer, were visiting to get a better understanding of Taiwan's needs and concerns.”

Canada Friend and Ally Watch:

August 29 – Bloomberg (Erik Hertzberg): “The Canadian economy contracted for the first time in nearly two years as the trade war with the US pummeled exports and business investment. Canada’s gross domestic product shrank at a 1.6% annualized pace in the second quarter… That’s the biggest decline since the Covid-19 pandemic and the first contraction in nearly two years.”

AI Bubble Watch:

August 24 – Bloomberg (Liam Denning): “Silicon Valley, powerful as it is, should be wary of ticking off 67 million Americans. PJM Interconnection is a regional transmission organization that manages the biggest electricity grid in the US, covering all or part of 13 Midwestern and mid-Atlantic states plus the District of Columbia. In all but four of those states, plus DC, average annual power bills in the year through May increased faster than the national average, which was eyewatering in itself at over 6%. Plug prices, rather than pump prices, are igniting a political firestorm… And at the heart of all this is the race for artificial intelligence.”

August 27 – BBC (Nadine Yousif): “A California couple is suing OpenAI over the death of their teenage son, alleging its chatbot, ChatGPT, encouraged him to take his own life. The lawsuit was filed by Matt and Maria Raine, parents of 16-year-old Adam Raine, in the Superior Court of California... It is the first legal action accusing OpenAI of wrongful death. The family included chat logs between Adam, who died in April, and ChatGPT that show him explaining he has suicidal thoughts. They argue the programme validated his ‘most harmful and self-destructive thoughts’.”

August 29 – Bloomberg: “China said it will prevent excess competition in the red-hot artificial intelligence sector, a signal that Beijing wants to avoid wasteful investment even as it seeks to turn the technology into a key pillar of the economy. The country’s top economic planner said the government will encourage provinces to develop AI in a coordinated and complementary way. The goal is to leverage their distinctive strengths to foster growth without duplicating efforts, according to Zhang Kailin, an official with the National Development and Reform Commission.”

August 28 – Bloomberg (Jihoon Lee): “South Korea's government plans to raise budget spending for next year by the steepest pace in four years as the country’s new president seeks to spur economic growth through a policy of boosting investment in artificial intelligence. In its annual spending plan released on Friday, the finance ministry set total government expenditure for 2026 at 728.0 trillion won ($524.44bn). That is up 8.1% from 2025…”

Bubble and Mania Watch:

August 27 – Axios (Madison Mills): “Stock market investing is at record highs, with some new demographic trends: Younger people are investing earlier, and lower-income people are investing more, new research from the JPMorganChase Institute shows. Those investing patterns come amid a decline in first-time home ownership, suggesting a shift in how young people are planning to build wealth, which could have serious policy and economic implications. ‘Fewer 25-year-olds own a home, but more 25-year-olds are investing in the stock market,’ says George Eckerd, research director at JPMorganChase Institute. As of early 2025, people with below-median incomes were five times more likely to be adding money to financial investments than they were a decade ago. About a third of 25-year-olds have investment accounts today. That’s a sixfold increase relative to 2015.”

August 27 – Bloomberg (Fareed Sahloul, Ben Scent and Aaron Kirchfeld): “Dealmaking during the typically slow summer months has crossed the $1 trillion mark after a burst of mergers and acquisitions in August. Companies have announced $1.05 trillion of transactions since the beginning of June… That’s up 30% from a year earlier and the highest tally for this spell since the record-breaking summer of 2021, when the pandemic sparked a deals boom…”

August 24 – Financial Times (Jasper Goodman, Michael Stratford and Declan Harty): “The financial world is barreling toward a lobbying civil war in Washington. Cryptocurrency companies are increasingly coming to blows with banks and other Wall Street firms over Republican-led efforts to enact new rules for digital assets, creating a clash between powerful lobbying groups that is poised to come to a head next month when Congress returns from its August recess. The crypto industry has notched a series of lobbying victories since President Donald Trump returned to office earlier this year… Now, with Republicans on Capitol Hill preparing to pass a second, larger bill aimed at boosting the crypto market, Wall Street groups are starting to pump the brakes, warning that some crypto-friendly reforms could upend their businesses and threaten financial stability.”

August 25 – Bloomberg (Vildana Hajric): “The ETF boom that has democratized investing across America is reaching a tipping point. Investors and financial advisers have too many funds to choose from. Thanks to a breakneck pace of new launches, there are now more than 4,300 exchange-traded funds, a figure that for the first time eclipses the total number of stocks, currently hovering around 4,200…”

August 24 – Financial Times (Hannah Pedone, Antoine Gara and Ivan Levingston): “Private equity firms are struggling to raise money despite offering unprecedented enticements to attract new investor cash, underscoring a sector-wide contraction that is denting the profitability of the industry. Private equity groups raised just $592bn in the 12 months to June: their lowest tally for seven years, data from Preqin show.”

Inflation Watch:

August 29 – CNBC (Jeff Cox): “Inflation edged higher in July, according to the Federal Reserve’s preferred inflation measure, indicating that President Donald Trump’s tariffs are working their way through the U.S. economy. The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate… That was up 0.1 percentage point from the June level and the highest annual rate since February… On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.”

August 29 – Axios (Ben Geman and Chuck McCutcheon): “Electricity prices are surging across the country as a perfect storm of aging equipment and AI demand slams the nation’s grid. Paying more to keep air conditioners, laptops and other electronics running is straining household budgets as Americans deal with other rising costs. Prices are up and projected to keep rising in 2026… The nationwide average retail residential price for electricity is about 7% higher than this time last year and 32% higher than it was five years ago, according to Energy Department data. These surging prices are driven by infrastructure problems, public policy and — increasingly — massive new AI data centers. Outdated power grid. Experts say the pressure being put on the electricity grid to handle more transmission is a big reason.”

August 27 – Bloomberg (Ari Natter and Naureen S. Malik): “Surging utility bills in key battleground states are threatening to become a political liability for Republicans heading into upcoming elections. Nowhere is that more apparent than on the largest US grid, stretching from Virginia to Illinois, where the cost of securing wholesale power supplies has been at a record for two straight years. The region includes two states electing governors this November, as well as four that are facing competitive House and Senate races next year. And nearly all of the electricity there comes from natural gas, nuclear reactors and coal. That means President Donald Trump’s strategy of blaming renewable energy for surging electricity costs – including calling wind and solar ‘the scam of the century’ last week — may have a hard time gaining traction.”

August 28 – Wall Street Journal (Patrick Thomas and Sarah Nassauer): “U.S. companies have an unwelcome message for inflation-weary consumers: Prices are going up. Companies including Hormel Foods, J.M. Smucker and Ace Hardware said this week they would raise prices for reasons ranging from higher meat costs to tariffs. Large retailers like Walmart, Target and Best Buy said some tariff-related price increases are already in place. More are on the way. ‘Some vendors are clearly communicating cost increases. Some are adjusting promotions. Some are planning to potentially increase prices with new product introductions, which always happens,’ Best Buy Chief Executive Corie Barry said… The escalating prices offer a glimpse of how President Trump’s trade policy is starting to trickle down to American shoppers.”

August 26 – Reuters (Abhinav Parmar): “The Trump administration’s tariffs have raised manufacturing costs for the $50 billion U.S. heavy-duty truck industry, prompting companies to consider sourcing more components from Mexico to benefit from concessions under the US-Mexico-Canada Agreement (USMCA). U.S. truck manufacturers currently face 50% tariffs on imported steel, aluminum and copper derivatives under Section 232 of the Trade Expansion Act. In addition, manufacturers… are hit with tariffs on every non-USMCA-compliant part they import.”

Federal Reserve Watch:

August 25 – Axios (Courtenay Brown and Neil Irwin): “President Trump said he had fired Federal Reserve governor Lisa Cook on Monday… The firing is a legally dubious move that further threatens the central bank's political independence, one that might set up a legal battle in the months ahead. Trump cited Article II of the Constitution and the Federal Reserve Act of 1913 to tell Cook she was ‘removed’ from her position, ‘effective immediately’… ‘President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so,’ Cook said… ‘I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,’ Cook said.”

August 26 – Wall Street Journal (Brian Schwartz): “President Trump has told advisers that he wants to move quickly to announce a nominee to replace Lisa Cook on the Federal Reserve’s board of governors… ‘We have some very good people for that position,’ Trump told reporters… Trump said he might appoint Stephen Miran, a close economic adviser, to replace Cook. Earlier this month, the president nominated Miran to fill a different seat on the Fed’s board. But the term for that seat expires in January. Cook’s term is set to expire in 2038. ‘We might switch him to the other—it’s a longer term,’ Trump said…”

August 27 – Financial Times (Janet Yellen): “US President Donald Trump’s claim that he has ‘fired’ Federal Reserve governor Lisa Cook ‘for cause’ is not only unlawful. It is profoundly dangerous. It represents a direct attempt to politicise the Fed, intimidate its leadership and bend monetary policy to the president’s will. This action threatens to end the independence of the Federal Reserve — and with it, the credibility of the US’s monetary policy both at home and abroad. The law is clear: Federal Reserve governors serve 14-year terms precisely so they cannot be tossed aside by presidents who dislike their views or who seek their allegiance. Removal ‘for cause’ is intended for documented misconduct. ‘Accusations’ are not ‘cause’. Cook has done her job with integrity — weighing evidence and voting for policies designed to achieve the Fed’s dual mandate of price stability and maximum employment. For Trump to invoke cause here is a fiction; it is a pretext to justify an autocratic power grab. This is not about one Federal Reserve governor. It is about intimidation.”

August 28 – Bloomberg (Steven T. Dennis): “The Republican-led US Senate is likely to meet the ambitious target outlined by the Trump administration to fast-track Stephen Miran’s Federal Reserve confirmation before the central bank’s September rate-setting meeting, barring any procedural glitches or unexpected opposition. The Senate Banking Committee announced Thursday it would hold a hearing on Miran’s confirmation Sept. 4...”

August 28 – Reuters (Ann Saphir): “Federal Reserve Governor Christopher Waller… stepped up his call for cutting short-term U.S. borrowing costs, saying he would support an interest-rate cut next month and further reductions over the next three to six months to prevent the labor market from collapsing. ‘Based on what I know today, I would support a 25 bps cut’ at the upcoming September 16-17 meeting…, he said… ‘While there are signs of a weakening labor market, I worry that conditions could deteriorate further and quite rapidly, and I think it is important that the FOMC not wait until such a deterioration is under way and risk falling behind the curve in setting appropriate monetary policy.’”

August 25 – Reuters (Michael S. Derby): “Federal Reserve Bank of New York President John Williams said… the era of persistently low underlying interest rates does not appear to be over, based on his reading of the data. Williams… spoke about R-Star, which is an estimate of the interest rate that has a neutral impact on the economy… Noting the long-running factors affecting underlying interest rates, Williams said, ‘The global demographic and productivity growth trends that pushed R-Star down have not reversed.’ ‘The era of low R-Star appears far from over,’ Williams said.”

U.S. Economic Bubble Watch:

August 27 – New York Times (Lydia DePillis): “It’s no secret by now… that optimism around the windfall that artificial intelligence may generate is pumping up the stock market. But in recent months, it has also become clear that A.I. spending is lifting the real economy, too. It’s not because of how companies are using the technology, at least not yet. Rather, the sheer amount of investment — in data centers, semiconductor factories and power supply — needed to build the computing power that A.I. demands is creating enough business activity to brighten readings on the entire domestic economy. Companies will spend $375 billion globally in 2025 on A.I. infrastructure…, UBS estimates. That is projected to rise to $500 billion next year. Investment in software and computer equipment, not counting the data center buildings, accounted for a quarter of all economic growth this past quarter… Even that probably doesn’t reflect the whole picture.”

August 28 – Associated Press (Paul Wiseman): “The U.S. economy rebounded this spring from a first-quarter downturn due to fallout from President Donald Trump’s trade wars. In an upgrade from its first estimate in July, the Commerce Department said… U.S. gross domestic product… expanded at a 3.3% annual pace from April through June after shrinking 0.5% in the first three months of 2025. The department had initially estimated second-quarter growth at 3%... Consumer spending, which accounts for about 70% of GDP, grew at a 1.6% annual pace, lackluster but better than 0.5% in the first quarter and the 1.4% the government initially estimated...”

August 28 – Associated Press (Christopher Rugaber): “Fewer Americans sought unemployment benefits last week as employers appear to be holding onto their workers even as the economy has slowed. Applications for unemployment benefits for the week ending Aug. 23 dropped 5,000 to 229,000… The total number of Americans collecting unemployment benefits for the previous week of Aug. 16 fell 7,000 to 1.95 million, down from nearly a four-year high reached earlier this month.”

August 26 – Associated Press (Matt Ott): “Americans’ view of the U.S. economy declined modestly in August as anxiety over a weakening job market grew for the eighth straight month. The Conference Board said… its consumer confidence index ticked down by 1.3 points to 97.4 in August, down from July’s 98.7, but in the same narrow range of the past three months… A measure of Americans’ short-term expectations for their income, business conditions and the job market fell by 1.2 points to 74.8… Consumers’ assessments of their current economic situation also fell modestly, to 131.2 in August from 132.8 in July.”

August 27 – Financial Times (Diana Olick): “For the second week in a row, mortgage demand has barely moved, as interest rates also remain stuck in the mud… Applications for a mortgage to purchase a home rose 2% for the week and were 25% higher than the same week one year ago. That small gain made this the strongest week for purchase demand in a month…”

August 26 – Bloomberg (Prashant Gopal): “Home-price growth in the US slowed for a fifth straight month in June. A national gauge of prices rose 1.9% from a year earlier, according to… S&P CoreLogic Case-Shiller. That was the smallest gain since the summer of 2023 and followed a 2.3% increase in May. The US is coming off its weakest spring selling season in 13 years after high prices and mortgage rates sidelined many would-be buyers… June’s results ‘mark the continuation of a decisive shift in the housing market,’ Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, said... ‘The modest 1.9% annual gain masks significant volatility, with the first half of the period showing declining prices that were more than offset by a 2.5% surge in the most recent six months, suggesting the housing market experienced a meaningful inflection point around the start of 2025.’”

August 24 – Wall Street Journal (Paul Kiernan): “Last week, Federal Reserve Chair Jerome Powell said the U.S. labor market has entered ‘a curious kind of balance.’ The demand for workers has cooled, yet the unemployment rate has held steady because the supply of labor has slowed abruptly. Behind that slowing in the labor supply is a dramatic swing in immigration, from one of the biggest waves in U.S. history to almost none. Economists say that could have subtle but lasting consequences.”

August 25 – Bloomberg (Jade Thomas and Keith Naughton): “Once rare, seven-year car loans are fast becoming the norm. They’re often the only way buyers can afford new rides, with average sale prices surging 28% in five years to approach $50,000… In the second quarter of 2025, seven-year loans represented 21.6% of all new-vehicle financing, according to Edmunds.com. Six-year loans… are now the most common, accounting for 36.1% of loans in the second quarter. Some buyers are even going for eight-year loans, although they’re still a tiny fraction of the market.”

China Watch:

August 24 – Bloomberg: “China dialed up its injection of longer term liquidity into its financial system in a move that’s likely intended at easing the selloff in bonds and ensuring adequate funding for the flailing economy. The People’s Bank of China added a net 600 billion yuan ($84bn) via its one-year medium-term facility as well as three and six-month outright reverse repos this month, the most since January… The measures underscore Beijing’s desire to retain stable funding conditions and facilitate government borrowing, after investors demanded the highest yields since December at a 30-year auction.”

August 28 – Financial Times (Cheng Leng): “China’s five biggest banks have unveiled worsening performances in a slew of business areas after the country’s economic slowdown and stagnant wages ate into quarterly earnings. The banks, led by Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB), dominate lending in the world’s second-largest economy, with combined assets of more than Rmb195tn ($27tn). In an insight into the health of China’s financial system, the five lenders on Friday issued second-quarter results that showed rising consumer loan delinquencies and worse than expected net interest margins… ‘A receding property market and tightening consumer spending are reshaping banks’ credit demand and credit quality,’ said Nicholas Zhu, vice-president and senior credit officer at Moody’s. ‘Mortgages and retail debt, the traditional risk buffer and higher quality business for banks, are now showing higher credit risks than corporate loans at some banks… This is a structural reversal and a concerning phenomenon for the industry.’”

August 27 – Bloomberg: “China’s commercial banks are tightening oversight of clients using credit cards to fund stock investments as small-time investors pour in to catch the nation’s $1 trillion market rally. Lenders… warned over the past month that credit card funds and cash advances can’t be used for investments among other prohibited areas…”

August 24 – Bloomberg: “China’s financial hub of Shanghai eased home-buying rules in the latest attempt by authorities to contain the nation’s prolonged property crisis. Eligible residents, including those from outside Shanghai, can now buy an unlimited number of homes in the outer suburbs… Non-residents who have paid pensions for three years can now purchase new homes in urban areas, instead of only being allowed to buy existing residences there.”

August 25 – Bloomberg (Daisuke Wakabayashi and Joy Dong): “When China Evergrande, once the biggest Chinese property developer, went public in Hong Kong in 2009, the country’s real estate market was red-hot. The frenzy over the company was so intense that for every lucky person who bought at least one share of stock, 46 others were shut out. How times have changed. Now a symbol of China’s real estate boom and bust, Evergrande was delisted from the Hong Kong Stock Exchange on Monday… Evergrande’s collapse, with $300 billion in debt, mirrors the slow and painful unwinding of China’s property sector. Government policies staved off a sudden crash, and instead delivered a grinding slowdown.”

August 27 – Wall Street Journal (Dylan Tokar): “Chinese money launderers appear to have moved some $312 billion in illicit transactions through U.S. banks and other financial institutions in recent years to aid Mexican drug cartels and other criminals, the Treasury Department said. This growing marketplace connecting dirty cash from Mexico’s drug cartels to Chinese expats looking to get their savings out of China is drawing scrutiny from the Trump administration, which wants banks to help crack down.”

Central Banker Watch:

August 24 – Bloomberg (Jana Randow and Catarina Saraiva): “European Central Bank President Christine Lagarde warned against questioning the independence of policymakers and their institutions, arguing that economies risk becoming dysfunctional if governments get involved in setting interest rates. ‘The independence of any central bank is critically important,’ Lagarde said… ‘We have to be accountable, we have to report back and answer all the questions of either Congress in the US or the European Parliament, for me. But it’s vitally important that a central bank is independent.’ She added that during her time at the top of the International Monetary Fund, she had a chance to watch what happens when central-bank independence comes under threat. ‘It becomes dysfunctional, it starts doing things that it shouldn’t do,’ Lagarde said. ‘The next step is disruption. It is instability, if not worse. So I think that this should not be debated.’”

August 26 – Politico (Ben Munster, Johanna Treeck and Carlo Boffa): “Europe’s central bankers were cautiously critical… of U.S. President Donald Trump’s efforts to oust a top Federal Reserve official. They expressed unease at the potential spillover effects from a growing political threat to the independence of the world's most important central bank… Across the Atlantic, Cook’s counterparts at the European Central Bank are alarmed that Trump's moves could not only set a dangerous precedent — but also have a tangible impact on their own policymaking, which is inexorably influenced by the course charted by the Fed. ‘Attacking the independence of the Fed, the Trump administration inflicts a serious damage to the American economy,’ said Bank of Greece Governor Yannis Stournaras… ‘The implications will come sooner rather than later.’”

August 24 – Reuters (Francesco Canepa, Howard Schneider and Leika Kihara): “Global central bankers gathered at a U.S. mountain resort over the weekend are starting to fear that the political storm surrounding the Federal Reserve may engulf them too. U.S. President Donald Trump’s efforts to reshape the Fed to his liking and pressure it into interest rate cuts have raised questions about whether the U.S. central bank can preserve its independence and inflation-fighting credentials… If the world's most powerful central bank were to yield to that pressure, or Trump finds a playbook for removing its members, a dangerous precedent would be set from Europe to Japan, where established norms for the independence of monetary policy may then come under new attack from local politicians. ‘The politically motivated attacks on the Fed have a spiritual spillover to the rest of the world, including Europe,’ European Central Bank policymaker Olli Rehn, from Finland, said…”

August 28 – Bloomberg (Swati Pandey): “Australia’s central bank warned that a global shift of financing away from regulated banks and into private markets is making it harder for authorities to contain risks to the financial system, days after the nation’s corporate watchdog vowed to step up scrutiny of the sector. ‘Changes in the nature of financial intermediation internationally, where more financing is occurring outside of prudentially regulated entities, is limiting the ability of authorities to monitor and address potential financial stability risks,’ the Reserve Bank said…”

August 27 – Reuters (Stella Qiu and Wayne Cole): “Australian consumer prices jumped by far more than forecast in July as electricity costs spiked due to the timing of government rebates, while core inflation also jumped in a blow to hopes of a rate cut as soon as next month.”

Europe Watch:

August 26 – Bloomberg (William Horobin): “Opposition to French Prime Minister Francois Bayrou’s government gained momentum on Tuesday, adding to the likelihood that it could be forced out in a confidence vote as soon as next month. Three of the largest opposition parties in France’s National Assembly — the far-right National Rally, the leftist France Unbowed and the Socialists – have all indicated they will vote against the motion, which would force the government to resign.”

August 26 – Reuters (Ruxandra Iordache): “France’s minority government… faced the prospect of collapse within weeks, after opposition parties said they would not back Prime Minister Francois Bayrou in a Sept. 8 confidence vote tied to his budget cut plans… France’s need to lower its public deficit is a long-running and highly politically contentious subject. Forcing through a 2025 budget without parliamentary approval last year led to the collapse of the previous minority government... Political volatility has increased in France since the July 2024 parliamentary election failed to deliver any party or coalition a majority… Bayou said France’s dependence on debt had become ‘chronic.’ ‘Our country is in danger, because we are at risk of over-indebtedness,’ he said…”

Japan Watch:

August 24 – Reuters (Howard Schneider and Leika Kihara): “Bank of Japan Governor Kazuo Ueda said wage hikes are spreading beyond large firms and likely to keep accelerating due to a tightening job market, signaling his optimism that conditions for another interest rate hike were falling into place… ‘Barring a major negative demand shock, the labor market is expected to remain tight and continue to exert upward pressure on wages,’ he said.”

Leveraged Speculation Watch:

August 26 – Bloomberg (Yiqin Shen and Denitsa Tsekova): “A niche hedge fund strategy involving convertible debt is having a moment… So-called convertible arbitrage, which seeks to profit from pricing discrepancies between convertible bonds and their underlying shares, has returned almost 6% through July — putting it among the top-performing hedge fund trades in the first seven months of the year, according to a Hedge Fund Research index which tracks 120 funds… Inflows into the strategy, meanwhile, are on track for their biggest annual jump in 18 years.”

August 26 – Bloomberg: “China’s equity bull run is getting a boost from the country’s domestic hedge funds, fueling hope among local brokers that the liquidity-fueled rally has legs. An index tracking the equities positions of Chinese hedge funds that manage over 10 billion yuan ($1.4 billion) rose more than 8 percentage points to 82% in the week ended Aug. 15… That’s the biggest weekly increase in about two years.”

August 27 – Donald J. Trump: “There is a sick rumor going around that Fake News NBC extended the contract of one of the least talented Late Night television hosts out there, Seth Meyers. He has no Ratings, Talent, or Intelligence, and the Personality of an insecure child. So, why would Fake News NBC extend this dope’s contract. I don’t know, but I’ll definitely be finding out!!!”

Social, Political, Environmental, Cybersecurity Instability Watch:

August 25 – Bloomberg (Ari Natter): “The Trump administration is working to halt development of an offshore wind project planned near Maryland, in the latest escalation of the president’s war on the clean energy source he loathes. The Interior Department plans to move to remand and vacate a permit granted to the $6 billion Maryland Offshore Wind Project… The project — which is being developed by US Wind and will consist of as many as 114 wind turbines about 10 nautical mileso off the coast of Ocean City, Maryland — was approved by the Biden administration in 2024 and was set to begin construction next year.”

August 27 – Associated Press (Laura Millan): “The wildfires that raged across Greece, Turkey and Cyprus this summer were 22% more intense and 10 times more likely than they would have been in a world without climate change, according to scientists. The extremely hot, dry and windy conditions that drove the chaotic spread of fires across the eastern Mediterranean would only occur once every century without man-made climate change, according to researchers from World Weather Attribution…”

Geopolitical Watch:

August 25 – Bloomberg: “Venezuela vowed to reinforce security along its border with Colombia as President Donald Trump’s administration sends US warships to the southern Caribbean. President Nicolas Maduro used his weekly television show to confirm he ordered the deployment of 15,000 ‘well armed and trained’ men and women to the states of Zulia and Tachira. He also singled out Trump’s top diplomat, Secretary of State Marco Rubio, warning the US move risked becoming a debacle.”