Bloomberg

Lead Story

The US inflation outlook darkened as August core CPI rose 0.3% month-over-month—beating forecasts on surges in cellular phone plans and energy costs—to reach 2.4% annually. The hotter reading cemented market expectations for a Federal Reserve interest-rate hike next week under Chair Kevin Warsh, driving benchmark 10-year Treasury yields toward the 5% threshold. Compounding inflationary pressures, crude oil spiked above $107 a barrel and US diesel prices breached $6 a gallon for the first time on record after Saudi Arabia closed its critical East-West pipeline following attacks.

Markets & Economics

• BOJ Watchers Expect Rate Hikes Next Week and by January: Economists surveyed by Bloomberg project the Bank of Japan will raise its benchmark interest rate next week and follow up with another increase by January 2027. Elevated corporate goods prices are accelerating Japan’s monetary policy normalization despite global market volatility.
• UK GDP Unexpectedly Expands 0.4% in July: Britain’s economy delivered a surprise 0.4% growth rate in July, providing timely relief for Prime Minister Andy Burnham. Robust performance across broad sectors and productivity gains tied to AI deployment offset headwinds from rising household energy costs.
• France Abandons Deficit Target as Growth Slows: French Finance Minister Roland Lescure downgraded the nation’s 2026 economic growth forecast to 0.5% from 0.7% as economic momentum stumbles. Consequently, Paris abandoned its plan to reduce the budget deficit below 5% of GDP this year, exacerbating fiscal concerns in the eurozone.
• India Foreign Exchange Reserves Hit Record $785.7 Billion: Foreign capital inflows boosted India’s currency reserves by a record margin to $785.7 billion, providing the central bank with vast defense capability for the rupee. Simultaneously, the Reserve Bank of India moved to drain 1 trillion rupees ($10.5 billion) in surplus banking cash to suppress emerging inflationary pressures.
• US Convertible Bond Issuance Reaches Record High on AI Capex: Sales of convertible bonds in the US hit an all-time annual record, according to Bloomberg data, driven by technology corporations financing massive artificial intelligence infrastructure investments. The rush underscores how capital markets are pivoting to satisfy capital-intensive tech balance sheets amidst high traditional borrowing costs.

Business & Industries

• Oracle Cloud Surges on AI Demand While Kroger Trims Sales Outlook: Oracle Corp. shares rose after reporting better-than-expected quarterly cloud revenues fueled by booming artificial intelligence workloads. Conversely, grocery titan Kroger Co. reduced its full-year sales guidance as aggressive price competition for consumer wallet share crimped retail volumes.
• Apollo Global Pursues Acquisition of J&J Orthopedics Business: Private equity giant Apollo Global Management Inc. is in talks to acquire Johnson & Johnson’s orthopedics unit as the healthcare conglomerate advances a planned separation of the division . A deal would mark another major private equity takeover in healthcare manufacturing and medical tech .
• Stellantis Commits €1 Billion to French Plant and Sells Toronto Site: Stellantis NV plans to invest more than €1 billion ($1.16 billion) to manufacture a new commercial van in France as part of a European production overhaul . Concurrently, the automaker signed an agreement to sell its idled plant near Toronto to Canadian armored vehicle maker Roshel amid tariff headwinds .
• UBS Launches $7.9 Billion Debt Buyback for Credit Suisse Bonds: UBS Group AG is repurchasing $7.9 billion in legacy Credit Suisse debt, marking its largest balance-sheet optimization step since taking over its former rival. The move aims to eliminate high-cost debt inherited during the government-arranged emergency acquisition.
• AstraZeneca Breast Cancer Pill Fails Key Late-Stage Trial: AstraZeneca Plc reported that its experimental oral breast cancer treatment failed to improve progression-free survival compared to standard care in a Phase 3 study . The setback dampens market expectations for one of the pharmaceutical group’s key pipeline growth candidates .

Policy & World

• BRICS Leaders Gather in India Amid Global Trade and Conflict Pressures: Russian President Vladimir Putin, Chinese President Xi Jinping, and Iranian President Masoud Pezeshkian arrived in New Delhi for the BRICS summit hosted by Indian Prime Minister Narendra Modi. Discussions center on reforming international financial institutions and mitigating the impacts of Western sanctions and tariffs.
• White House Defends $5,000 Stimulus Checks Ahead of Midterms: National Economic Council Director Kevin Hassett maintained that President Donald Trump’s proposal to issue $5,000 checks to adult US citizens is a “fiscally responsible” plan. The proposal comes as Vice President JD Vance urged conservative voters in Dallas to stay unified behind the Republican ticket despite economic anxiety.
• Pentagon Urges Action on $1.5 Trillion Munitions Replacement Funding: Top defense acquisition official Michael Duffey called on Congress to pass the administration’s $1.5 trillion defense budget request. The Pentagon requires immediate capital to replenish depleted stockpiles of critical Patriot and Tomahawk missiles expended in ongoing military operations.
• South Korea President Approval Rating Plunges Over Hormuz Deployment: South Korean President Lee Jae Myung’s approval rating hit a new low following severe political pushback over potential troop deployments to the Strait of Hormuz. The backlash underlines domestic resistance to US diplomatic pressure to secure the energy corridor.

Opinion & Analysis

• Dudley Warns Fed Must Hike Rates to Safeguard Credibility: Former New York Fed President Bill Dudley argues that Federal Reserve Chair Kevin Warsh must deliver a 25-basis-point interest-rate increase next week. Dudley contends that failing to tighten policy after persistent upside inflation signals would risk sparking a self-reinforcing bond yield spike.
• Bridgewater’s Greg Jensen Proposes ‘Token Tax’ to Counter AI Extinction Risk: Bridgewater Associates Chief Investment Officer Greg Jensen warns that the rapid trajectory of advanced AI deployment creates systemic human and economic vulnerabilities. He proposes implementing a global “token tax” on computing usage to fund safety guardrails and mitigate labor market displacement.
• Canada Seeks European Hedge Against US Tariff Escalation: Bloomberg Opinion columnist Lionel Laurent analyzes Canada’s accelerating trade alignment with the European Union as an “insurance policy” against US tariff threats. Laurent notes that Canadian decision-makers are systematically diversifying economic partnerships to reduce exposure to Washington’s protectionist rhetoric.

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