Bloomberg

Lead Story

Federal Reserve Chairman Kevin Warsh delivered a hawkish debut address at the Jackson Hole economic policy symposium, warning that inflation has failed to cool meaningfully and declaring that policymakers have “work to do” to bring consumer prices back to their firm 2% target. Warsh noted that broad financial conditions can hardly be described as “restrictive” and discarded conventional forward guidance, arguing that economic forecasting remains merely “an aspiration”. The remarks triggered an immediate repricing across Wall Street, driving two-year Treasury yields and real yields sharply higher while equities slipped into negative territory as traders priced in a roughly 50% probability of an upcoming interest-rate hike.

Markets & Economics

• Canada Economy Grows 3.3% in Second Quarter, Fastest Since ’23 (Bloomberg): Gross domestic product expanded at an annualized 3.3% rate in the second quarter, rebounding from a yearlong trade-induced slump despite a prolonged Statistics Canada website outage that delayed data access for market participants. The output rebound demonstrates domestic economic resilience against tariff headwinds, reducing immediate pressure on the Bank of Canada for additional monetary easing.
• Euro Zone’s Inflation Rate Is Set to Reach Highest Since 2023 (Bloomberg): Euro-area consumer price inflation accelerated toward multi-year peaks as energy costs drove French inflation higher and Spanish inflation surged to more than double the official target. The acceleration has strengthened the consensus among European Central Bank policymakers that a September interest-rate hike is practically unavoidable to prevent price expectations from de-anchoring.
• Japan Yen Intervention Hits Record $96 Billion in Past Month (Bloomberg** (Bloomberg): Tokyo spent an unprecedented $96.4 billion over the past month to arrest the slide of the yen, but the currency slumped back through the critical 160-per-dollar threshold as wide yield gaps overwhelmed currency authorities. US Treasury Secretary Scott Bessent defended official currency interventions, cautioning that unchecked Japanese currency volatility creates significant spillover risks that could push US interest rates higher.
• US Job Growth Marked Down in Preliminary Benchmark Estimate (Bloomberg): Annual payroll revisions by the Bureau of Labor Statistics showed job additions through March were noticeably softer than originally reported. The markdown confirms underlying cooling in employment that justified prior Federal Reserve rate reductions, even as persistent inflation narrows room for further policy maneuvers.

Business & Industries

• BYD Profit Rises for First Time in Five Quarters on Exports (Bloomberg): The world’s largest electric-vehicle manufacturer snapped a yearlong earnings decline as surging overseas deliveries and premium model sales offset aggressive domestic discounting in China. The performance highlights Chinese automakers’ accelerating export push, which saw their share of European new-car registrations exceed 11% on strong hybrid demand.
• Solstice, Element Solutions Terminate $14.5 Billion Merger (Bloomberg): Solstice Advanced Materials and Element Solutions mutually dissolved their planned $14.5 billion merger after receiving adverse shareholder feedback, scrapping a deal aimed at creating an electronic chemicals titan. The collapse reflects mounting investor pushback against high-premium corporate combinations amid elevated financing costs.
• Blue Owl Leads $2.4 Billion Iren Debt Deal to Buy Nvidia’s Chips (Bloomberg): Blue Owl Capital structured a $2.4 billion private credit financing package for cloud operator Iren Ltd. to purchase Nvidia’s Blackwell Ultra GPUs for a Canadian computing hub. The agreement highlights private credit’s expanding role in funding the artificial intelligence infrastructure boom as traditional bond markets grapple with heavy tech issuance.
• Lilly Diabetes Shot Mounjaro Wins US Approval for Heart Disease (Bloomberg): Eli Lilly & Co. won FDA clearance to market its flagship GLP-1 drug Mounjaro for the prevention of serious cardiovascular events in high-risk patients. The expanded label broadens Mounjaro’s reach beyond blood-sugar control, enhancing its competitive position in the multibillion-dollar metabolic treatment market.

Policy & World

• US Secures Control of Some Venezuelan Oil Reserves, Trump Says (Bloomberg): President Donald Trump announced that Washington reached a landmark pact to secure control over designated Venezuelan oil reserves, with the Pentagon simultaneously negotiating a direct operational venture with intermediary Alejandro Betancourt. The unilateral push comes as Caracas actively weighs quitting OPEC, threatening the structural cohesion of the global oil cartel.
• US Postal Service Mail Ballot Curbs Temporarily Blocked by Judge (Bloomberg): A federal court issued an injunction pausing the Trump administration’s tightened operational rules on mail-in ballots, halting controversial restrictions just months before the November congressional midterms. The ruling thwarts White House efforts to reshape postal voting protocols while the Department of Justice prepares an immediate appeal.
• Xi Orders Glacier Survey as Rescue Faces ‘Extreme Difficulties’ (Bloomberg): Severe glacial dam breaks along the Nepal-Tibet border killed hundreds and left more than 1,200 individuals missing, prompting Chinese President Xi Jinping to mandate immediate high-altitude geological surveys across the Tibetan Plateau. Nepalese officials and business executives cautioned that rebuilding basic transport and civic infrastructure will cost at least $5 billion, dealing a severe blow to the frontier nation’s $45 billion economy.

Opinion & Analysis

• Jaguar Land Rover Can’t Ignore Chinese Defender Lookalikes (Bloomberg): Bloomberg Opinion columnist Chris Bryant argues that Jaguar Land Rover’s most profitable franchise faces an existential threat as Chinese EV makers manufacture luxury off-roader lookalikes at a fraction of Western prices. Bryant warns that without aggressive product differentiation, premium Western automotive symbols risk being reduced to commoditized hardware.
• US Energy Dominance Descends Into Decadence (Bloomberg): A biting Bloomberg Opinion assessment highlights that 18 months after the White House formed the National Energy Dominance Council promising low prices and deficit reduction, drivers face $4-a-gallon gasoline, the national debt has topped $40 trillion, and the nation remains ensnared in a protracted Middle Eastern war. The column concludes that reliance on resource mercantilism has exposed the limits of political rhetoric against global economic fundamentals.
• Harvard’s Rogoff Says US Needs ‘Shock’ to Trigger Action on Debt (Bloomberg): Harvard economist Kenneth Rogoff warns that Washington’s deteriorating debt path will remain neglected until an acute systemic crisis shocks policymakers into fiscal austerity. Rogoff separately characterizes the administration’s escalating 50% tariff threats against Canada’s auto and steel sectors as a damaging and irrational “bar fight” between long-standing commercial partners.

📊 We could also drill deeper into how the Persian Gulf shipping and LNG force majeure disruptions are reshaping energy flows across Asian refiners, or contrast the yield curves across the Fed, ECB, and Bank of Japan.