Core Viewpoint - The selection process for the next Federal Reserve Chairman has officially begun, reflecting uncertainties in U.S. governance and its potential impact on global capital flows and economic policies [1][2]. Group 1: Federal Reserve's Role and Independence - The Federal Reserve's benchmark status in the global central banking system is attributed to its relative independence, which is now being challenged by political pressures [2][4]. - Recent years have seen the Fed adopt unconventional monetary policies, including significant money supply increases and low interest rates, which have been perceived as aligned with White House economic policies [2][4]. Group 2: Political Influence on Monetary Policy - The current political landscape has led to a conflict between the Fed's aggressive interest rate hikes to combat inflation and the White House's desire for a more compliant Fed Chair to stimulate economic growth ahead of midterm elections [2][3]. - Historical precedents exist where political pressures have directly influenced monetary policy, with the current situation being more overt and direct than in the past [3]. Group 3: Implications for Global Markets - The uncertainty surrounding the Fed Chair selection has implications beyond the U.S., affecting global markets through the dollar's dominance and U.S. Treasury yields [4]. - A potential departure of Chair Powell could lead to significant market reactions, including a sell-off of the dollar and U.S. bonds, particularly if policy adjustments are driven by political needs rather than economic fundamentals [4]. Group 4: Economic and Political Challenges - The U.S. economy faces challenges such as high debt, slow growth, and persistent inflation, complicating the effectiveness of traditional economic stimulus measures [4]. - Political polarization and short-term electoral considerations hinder the ability to formulate long-term economic policies, increasing the challenges to the Fed's independence [4].

Group 1 - The U.S. tariff policy and immigration restrictions are expected to negatively impact U.S. economic growth and inflation, affecting global markets [1][3] - The average effective tariff rate for all imported goods in the U.S. is currently 15%, a level not seen since 1938, and is projected to remain between 10% and 15% in the long term, indicating a shift towards a new international trade structure [3] - The current geopolitical landscape is characterized by significant uncertainty, with major power competition, particularly between the U.S. and China, becoming a structural norm in the international system [1][4] Group 2 - The changing global political landscape has profound implications for foreign policy, with key players such as Germany, Russia, and India emerging as significant factors in international relations [3][4] - The interaction between rising tensions among major powers and the political spillover effects from the U.S. are increasing systemic risks globally [4] - There is a call for major powers to rebuild crisis management mechanisms and establish functional cooperation in areas such as artificial intelligence, public health, and critical supply chain security to restore mutual trust [4]

Core Viewpoint - The Spanish central bank indicates that current mortgage conditions do not show any signs of deterioration in lending standards and emphasizes the need to prioritize the implementation of Basel III regulations to prevent the accumulation of global systemic risks [1] Group 1 - The Spanish central bank has not observed any signs of worsening lending standards in the current mortgage conditions [1] - There is a strong emphasis on the necessity to prioritize the execution of Basel III regulatory requirements [1] - The focus on Basel III is aimed at preventing the accumulation of systemic risks on a global scale [1]