Discussion aired live on Bloomberg Markets: The Close on October 6, 2025. CHICAGO, IL / ACCESS Newswire / October 10, 2025 / Monroe Capital LLC ("Monroe") Chairman and CEO Ted Koenig appeared on Bloomberg Markets: The Close on October 6, 2025, sharing views on inflation risk, interest-rate cuts, AI infrastructure, and the path for mergers and acquisitions in late 2025. ...

The US Federal Reserve chair, Jerome Powell, pushed back hard against claims the central bank allows politics to drive decisions, in the midst of an extraordinary battle over its independence.Donald Trump, who is seeking to increase his administration’s control over the Fed, has branded Powell “a very political guy” after he declined to bow to the president’s public demands for drastically lower interest rates.The White House has launched an unprecedented campaign to overhaul the Fed’s rate-setting board of ...

Inflation & Monetary Policy - The majority of the Federal Reserve saw inflation risk outweighing employment risk [1] - Several members flagged the risk of inflation expectations becoming unanchored [1] - Some Fed members suggested the current rate may not be far above neutral [1] - The Fed was already seeing some issues with inflation growing at the end of July [3] - The minutes offer support for the idea that the majority on the Fed isn't going to move if a weak employment report is released unless it's very weak [4] Tariffs Impact - Many noted the full effect of tariffs could take some time [4] - Fed economists were looking for about six months to see the pass-through effects of tariffs, say the end of the third quarter, the beginning of the fourth quarter this year [6] - The Trump administration's on-and-off approach to tariffs complicates the timeline [6] - Companies brought in imports early to build inventories, which are now being run down, leading to expected price increases [7][8] - Home Depot indicated they would have to start raising prices [8] Labor Market & Economic Outlook - The official subject of the Jackson Hole Economic Symposium is labor markets in transition [20] - The Fed looks at the unemployment rate as a proxy for US growth [22] - The Fed will likely look to the August payrolls report and its impact on the unemployment rate [22] Fed Independence & Political Pressure - Allegations against Federal Reserve Governor Lisa Cook have emerged, with calls for her resignation [10][11] - Removing Lisa Cook wouldn't significantly impact the president's goal of lowering interest rates, but it would allow him to appoint someone more sympathetic to low rates [13] - There are concerns about the Trump administration's efforts to influence public opinion and potentially weaponize the government against Democrats [11][16] - The Fed is independent, at least in terms of the way it acts, and is biased only towards what the economy is telling them to do [26][27]

Monetary Policy & Interest Rates - The Federal Reserve (FED) maintained unchanged interest rates, citing inflation risks, but two governors dissented, favoring a rate cut [1][46] - Markets priced out the possibility of a September rate cut, reducing expectations from 45 basis points to around 30 basis points for rate cuts by year-end, interpreting the FED as hawkish [2] - The Bank of Japan (BOJ) held benchmark interest rates but raised its inflation outlook, hinting at a potential rate hike in the coming months, possibly in October [51][52][58] Trade & Tariffs - President Trump imposed a 15% tariff on South Korean exports, with Seoul agreeing to invest $350 billion in the U S and buy $150 billion in energy products [1][9] - India faces a 25% tariff rate, potentially higher due to Russian energy purchases, which is perceived as a less favorable deal compared to South Korea's 15% [1][14][50] - Trade deals involve countries committing to invest in the U S and purchase energy products, with a common tariff rate around 15% to 20% [11][25] Company Earnings & Performance - Standard Chartered reported a second-quarter beat with $24 billion versus estimates of $19 billion, announcing a $13 billion buyback and projecting growth in the 52% to 7% range [6][7][8] - Meta and Microsoft posted strong earnings, with Meta projecting increased capital expenditures for AI investments and Microsoft reporting Azure cloud growth of 39% and $25 billion in Azure revenue [26][31][34] - Samsung's quarterly profit fell short of expectations due to export controls on high-bandwidth memory chips [36] Geopolitical & Regional Developments - Canada is planning to recognize a Palestinian state at the United Nations summit in September, a move rejected by Israel [1][37] - Bain is winding down its consulting operations in South Africa due to accusations of corrupt and fraudulent practices related to a contract with the country's tax agency [69][70][71] - Ghana lowered its interest rate to 25% from 28% after a significant slowdown in inflation [76]

Core Viewpoint - The article discusses the precarious state of the U.S. economy, highlighting the impact of fluctuating trade policies and the potential risks that could lead to a recession, despite recent employment growth and stable unemployment rates [1][2]. Group 1: Economic Indicators - In May, the U.S. added 139,000 jobs, with the unemployment rate remaining stable between 4% and 4.2% over the past year [1]. - Consumer debt delinquency rates have been rising for a year, raising concerns about the financial health of low-income borrowers and potential impacts on consumer spending [5]. Group 2: Major Risks - The article identifies three significant risks that could lead to severe consequences for the economy: 1. The fragile balance in the labor market, where companies are hesitant to lay off employees but are also not hiring, which could lead to a sudden spike in unemployment if demand weakens [4][5]. 2. A potential decline in consumer spending due to rising costs, with predictions of a 1% drop in housing prices this year as sellers outnumber buyers by nearly 500,000 [5]. 3. Financial market shocks or sudden shifts in sentiment, with rising long-term borrowing costs potentially affecting stock market performance and corporate profitability [6][7]. Group 3: Corporate Strategies - Companies are adopting various strategies to navigate the uncertain environment, with some choosing to wait and others adjusting supply chains. For instance, some firms are delaying price increases until trade policies stabilize [8]. - The overall sentiment among economists is that the likelihood of a recession has increased compared to earlier in the year, but remains lower than in April and early May [9].