The Federal Reserve’s surprise dovish pivot has ricocheted through every time zone. Jerome Powell’s Jackson Hole remarks drove Asia-Pacific equities up 1-2 %, shaved 6 bp off 10-year Treasuries and catapulted the Dow 860 points to a record high. Options markets now price an 84 % probability of a 25-bp cut on 18 September, and Fed-funds futures discount a full percentage-point of easing by mid-2026. (reuters.com, amp.cnn.com)

Powell justified the turn by citing sub-trend US growth (1.2 % annualised) and a climb in under-employment, yet headline CPI still runs at 2.7 %. Critics warn the Fed is blinking first in a stare-down with a $37 trn federal debt pile and escalating White House pressure. AP notes that political operatives are already treating monetary policy as a campaign lever, imperilling the Fed’s institutional fire-wall. (apnews.com)

History whispers caution: every post-Volcker easing cycle that began with inflation above 2.5 % (1987, 1998, 2019) eventually required a re-tightening within two years. If Powell mis-times this turn, today’s relief rally may seed tomorrow’s stagflation. As economist Mohamed El-Erian warns, “Policy mistakes reveal themselves with a lag, not a whisper.”

— The Gist AI Editor

Beverage Giants Brew Megadeal

Keurig Dr Pepper is reportedly nearing an $18 billion acquisition of JDE Peet’s, a move that would forge a global powerhouse in coffee and soft drinks (WSJ). The potential deal signals significant consolidation in the consumer staples sector, where scale is critical for market power. Notably, the combined company may later split its beverage and coffee units, suggesting a strategic play to unlock value by creating more focused firms. This reflects a dynamic view of capital where mergers are not permanent, but a tool to optimize assets in response to evolving market conditions.

Seoul Pivots to Beijing

South Korea is actively working to normalize relations with China, its primary trading partner, even as Seoul’s ties with Washington strengthen (Strait Times). A special envoy met with China’s Foreign Minister to upgrade economic and supply chain cooperation, a pragmatic move to mitigate risk amid global geopolitical friction. From our perspective, this underscores how national economic interests can compel cooperation, even between countries with differing political systems. Open trade channels often foster stability and prosperity more effectively than strategic blockades.

France’s Fiscal Reckoning

French Prime Minister Francois Bayrou’s government faces public anger as it prepares to detail over €40 billion in public spending cuts (Reuters). The austerity drive, aimed at shrinking France’s deficit from 5.8% of Gross Domestic Product, or the total value of goods and services produced, is a significant test for Paris. For free-market proponents, such fiscal discipline is overdue to rein in the state’s oversized role in the economy. However, the political cost of cutting expenditure remains a formidable barrier across Europe.

Stay tuned for the next Gist—your edge in a shifting world.

French PM Bayrou to hold news conference ahead of possible September protests
— Strait Times

South Korea tells China it wants to normalise ties, upgrade economic relations
— Strait Times

U.S. confirms nation’s first travel-associated human screwworm case connected to Central American outbreak
— Strait Times

Hunting Russian Drones in a Prop Plane With Shotguns
— Wall Street Journal

The return of package holidays: how travel chaos revived a dying industry
— Financial Times

Pepper…and Salt
— Wall Street Journal

Central Bank Sovereignty

At the Jackson Hole symposium, ECB President Christine Lagarde issued a pointed defense of central bank independence, warning that political interference renders monetary policy “dysfunctional” and leads to “disruption… if not worse.” Her remarks are a clear pushback against rising political pressure on the US Federal Reserve, signaling to markets that the ECB intends to safeguard its mandate from similar encroachment. For Europe, this is a crucial firewall; preserving the central bank’s autonomy is fundamental to anchoring inflation expectations and maintaining the long-term stability that enables private enterprise and investment to flourish. Any erosion of this principle invites the kind of policy volatility that ultimately penalises savers and businesses alike. (El Pais)

Climate’s Toll on Agriculture

Across Europe, farmers are grappling with the direct economic consequences of a shifting climate, forcing costly adaptations simply to remain viable. From Greek vineyards to Spanish olive groves, producers face increasing threats from extreme weather, which is expected to drive up consumer prices for staples like wine, olives, and vegetables. The agricultural sector is already facing climate-induced losses averaging €28.3 billion annually, equivalent to about 6% of its total output. This isn’t a future problem; it’s a present-day drag on a vital European industry, compelling entrepreneurs to innovate frantically as they confront conditions their predecessors never faced. The resilience of these businesses is being tested in real-time. (The Guardian)

Catch the next Gist for the continent’s moving pieces.

Trump sceglie co-fondatore Airbnb per migliorare siti di governo
— Ansa

‘We cannot do it the way our fathers did’: farmers across Europe struggle to adapt to the climate crisis
— Theguardian

Der Ukraine-Krieg im Zeitraffer
— Zdf

Frankfurt lässt Werder keine Chance
— Zdf

So sahen die ersten heute-Nachrichten aus
— Zdf

Capo Idf, ‘c’è un accordo per ostaggi e dobbiamo accettarlo’
— Ansa