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Kevin Warsh is set to become the next Fed chairman. Now that the political battle is over, the real challenges begin.

The Federal Reserve (Fed) is currently undergoing a paradigm shift. What began as a skirmish on social media and expanded into selective political influence has developed into a systemic question of monetary policy power relations.

Despite stagnating growth and persistent core inflation, the European Central Bank is likely to keep interest rates unchanged for now. Risks are seen as balanced, with a focus on data dependence and flexibility. As the economy weakens, the ECB is keeping all options open – the next move could well be a rate cut.

Despite the lack of economic data due to the US government shutdown, the Federal Reserve is heading for another interest rate cut. With a reduction of 25 basis points, the central bank aims to cushion economic risks and secure liquidity.

A weakening labour market, stable inflation expectations, and increasing political pressure suggest that the Federal Reserve (Fed) will make a decisive policy shift at its upcoming September meeting, explains Jörg Held, Head of Portfolio Management at ETHENEA Independent Investors S.A. An interest rate cut appears inevitable

Uncertainty continues to shape the ECB’s policy outlook. While the phase of rapid rate cuts appears to be over, internal divisions and persistent inflation risks are complicating decisions. With a data-driven approach, the ECB is keeping all options open for the months ahead.