Bank of England policymaker Megan Greene warned that mounting political pressure on the Federal Reserve’s independence could spill over to the UK https://t.co/IsrQIlfbY5 ...

Core Viewpoint - The article discusses the potential influence of former President Trump on the Federal Reserve's policies, particularly regarding interest rates, and highlights Christopher Waller's position as a key figure in this dynamic as he is considered a candidate to replace Jerome Powell as Fed chair [1][2][12]. Group 1: Waller's Position and Influence - Waller is seen as a proponent of central bank independence and has a reputation for making data-driven decisions, which he is not willing to compromise for political gain [3][12]. - Despite pressure from Trump and his allies for aggressive rate cuts, Waller has maintained a cautious approach, advocating for a quarter-point reduction rather than a more drastic half-point cut [5][6]. - Waller has expressed concerns about the Fed's role in political issues and has pushed for cost-cutting measures within the Fed, including a reduction of about 350 staffers in 2023 [18][20]. Group 2: Political Pressure and Fed Independence - Trump's administration is actively seeking to exert more control over the Fed, which could undermine its independence and have negative implications for the US economy and global markets [2][15]. - The potential for a board with a majority of Trump appointees raises concerns about the pressure to remove regional bank presidents, which could further compromise the Fed's autonomy [16][17]. - Waller's commitment to defending the Fed's independence is evident in his public statements emphasizing the importance of keeping politics out of monetary policy decisions [14][20]. Group 3: Economic Outlook and Policy Recommendations - Waller has been vocal about the need for lower interest rates, citing risks in the labor market and the impact of tariffs on inflation, which he believes should not be a persistent concern [9][10]. - His approach to monetary policy reflects a balance between advocating for necessary changes while maintaining the Fed's core mission and credibility as an inflation fighter [8][14]. - Analysts expect Waller to remain true to his economic analysis and not yield to political pressures for rate cuts that lack a clear economic justification [12][13].

The Indonesian rupiah is at risk of falling to a record low as lingering concerns over the central bank’s independence sap investor confidence, according to the currency’s top forecaster last quarter. https://t.co/nQcRE5m6f8 ...

Government and Economic Impact - The US federal government has entered its second day of a shutdown due to a political deadlock between congressional Democrats and Republicans, affecting federal services and leading to potential layoffs of hundreds of thousands of employees [3][7] - The Chicago Fed Labor Market Indicator for September showed a slight increase to 4.34%, indicating early labor market conditions, with the unemployment rate forecast remaining stable at 4.32% [11] Corporate Developments - Rivian Automotive, Inc. reported third-quarter deliveries of 13,201 vehicles, exceeding estimates, but narrowed its full-year 2025 delivery guidance to 41,500 to 43,500 vehicles, down from 40,000 to 46,000, causing pressure on its shares [5][7] - Kuwait Petroleum Corp. is in discussions with JPMorgan Chase & Co. for a potential pipeline deal valued at up to $7 billion, as part of a larger $65 billion investment plan to boost oil production capacity [10] Commodity Market Trends - Oil prices have declined for four consecutive days, driven by expectations of an OPEC+ supply boost, with Brent crude trading near $65 per barrel and West Texas Intermediate below $62 per barrel [6][7] Geopolitical Developments - A Russian ship was observed near a gas pipeline, highlighting ongoing regional tensions, while diplomatic negotiations are underway for a meeting between Brazil's President Lula da Silva and US President Donald Trump [12]

Indonesia’s finance minister has told friends and colleagues over the years that he doesn’t believe the central bank should be independent https://t.co/mykB1o8hH4 ...

Core Viewpoint - The head of Germany's Bundesbank emphasizes the importance of Europe supporting the independence of the U.S. Federal Reserve amid ongoing criticism from U.S. President Donald Trump [1] Group 1 - The Bundesbank's leadership highlights the need for a unified European voice in favor of the Federal Reserve's autonomy [1] - The independence of central banks is crucial for maintaining economic stability and credibility [1] - Ongoing attacks on the Federal Reserve's independence could undermine its effectiveness and the broader economic environment [1]

Inflation Concerns - The current inflation rate has been above the target of 2% for over four and a half years, with pressures noted in both headline and core inflation, particularly in services [1][4][5] - There is a belief that the inflationary pressures may not solely stem from tariffs, indicating a need for increased attention to the situation [2][10] Labor Market Dynamics - The labor market appears to be in balance, with an unemployment rate around 4.3%, which has remained stable for the past year [3][4][15] - Businesses are currently absorbing price pressures but may need to pass these costs onto consumers in the near future, particularly as contracts are renegotiated [7][8] Economic Outlook - The forecast suggests inflation will remain above target for the next one to two years, potentially not reaching the 2% goal until late 2027 or early 2028 [5] - There is optimism regarding consumer demand and corporate profits, which may support GDP growth despite elevated market valuations [20] Monetary Policy Stance - The current monetary policy is described as mildly restrictive, with a need to maintain this stance until there are signs of significant economic weakness [29][30] - A government shutdown could negatively impact GDP growth, but historically, such events have had minimal long-term effects [27][28]

Trade Policy Impact - President Trump announced new tariffs effective October 1, 2025, including 100% on imported branded pharmaceuticals, 25% on heavy-duty trucks, 50% on kitchen cabinets, and 30% on upholstered furniture, aimed at protecting domestic industries [2][3] - The pharmaceutical sector reacted variably, with domestic companies like Merck, Eli Lilly, and Johnson & Johnson seeing stock price increases due to exemptions for those investing in US manufacturing [3][4] - Asian pharmaceutical stocks, particularly Indian firms, faced declines, with Sun Pharma's shares dropping 5% and Biocon's by 3.3%, while the Nifty Pharma index fell 2.54% [4] Heavy-Duty Truck Industry - The 25% tariff on imported heavy-duty trucks negatively impacted European manufacturers like Daimler Truck, which could face a €700-800 million earnings hit, while American manufacturer Paccar Inc. saw stock gains of 5-7% [5] - Volvo Group, manufacturing all North American trucks domestically, also experienced stock price increases of nearly 3% [5] Kitchen Cabinets and Furniture - The 50% tariff on kitchen cabinets and 30% on upholstered furniture led to mixed market reactions, with domestic manufacturers like MasterBrand benefiting, while import-reliant retailers like RH and Williams-Sonoma suffered declines [6] Semiconductor Industry - A proposed policy requiring a 1-to-1 domestic-to-imported chip ratio boosted US chipmakers like Intel and GlobalFoundries, whose shares rose by 5.5% and 9% respectively, while Asian competitors saw declines of 2-6% [7] Market Reactions - The Dow Jones Industrial Average reached an all-time high of 42,313.00, while the S&P 500 and Nasdaq Composite experienced declines of 0.50% and 0.55% respectively [10] - Analysts noted that Trump's trade policy is seen as a tool for redistributing competitive advantage rather than a universal shock, leading to selective investment strategies [11]

Core Viewpoint - The Federal Reserve may not need to lower interest rates again soon, as inflation remains high and the labor market is still balanced despite some cooling [1][2]. Interest Rate Decisions - The recent 25-basis point cut in the policy rate was viewed as a reasonable risk-management strategy, with the current policy stance considered only "slightly restrictive" [2]. - Fed officials are divided on the number of additional rate cuts needed this year, with projections indicating a median expectation of two more quarter-point cuts, while many anticipate one or no cuts [3]. Labor Market and Inflation - A cooling labor market could help reduce price pressures, but recent data suggests an increased risk of a more sustained or abrupt economic slowdown [3]. - The Kansas City Fed chief emphasizes a data-dependent approach for future policy adjustments, closely monitoring inflation and labor market data [4]. Central Bank Independence - The importance of the Federal Reserve's independence from political interests is highlighted, as it is crucial for effective monetary policy and sound supervision and regulation [5]. - Independent supervisors can focus on long-term financial stability and respond agilely to instability, fostering public trust in the banking system [5].

Group 1: Gold Performance and Market Sentiment - Gold is on track for its second-best performance in the last 50 years, with an increase of over 43% as investors hedge against geopolitical and monetary risks [1] - Institutional allocations to gold remain low, with only 2.4% of fund managers' portfolios allocated to gold, despite its strong performance [3][4] - A significant 39% of fund managers reported having zero exposure to gold, while only 6% have allocations of 8% or more [4] Group 2: Institutional Investment Trends - Fund managers are heavily concentrated in equities, particularly technology stocks, with a net 28% overweight position in equities, the highest level since February [4] - Cryptocurrencies are also largely absent from institutional portfolios, with two-thirds of respondents reporting no allocation at all [5] - Risk perception is a key factor in the reluctance to allocate to gold and cryptocurrencies, with 26% of respondents citing a second wave of inflation as the most significant tail risk [5] Group 3: Central Bank Activity and Demand - Central bank purchases of gold were neutral in July, marking a pause after three years of record accumulation, where over 1,000 tons were added annually [7] - China continues to import non-monetary gold above the five-year average as part of its strategy to diversify reserves and reduce reliance on the US dollar [8] - This steady flow of gold imports from China provides structural support for gold, even as institutional allocations lag [8]