On The Deals Shaping Our Economy
Good morning. The Federal Reserve delivered another rate cut today, but the decision revealed deep cracks in the foundation of the central bank's consensus.
Driving the news: The Fed cut interest rates by a quarter-point to a range of 3.5% to 3.75% — its third cut this year — amid the most significant internal dissent since 2019.
The friction: Three officials formally dissented.
Why it matters: As Chair Jerome Powell approaches his final months in office, the path forward is clouded in uncertainty.
Markets are eyeing White House economic adviser Kevin Hassett — the presumed favorite to replace Powell — who recently argued that steep rate cuts are justified.
The decision reveals a central bank struggle: balancing a weakening labor market against inflation fears, all while operating in a data vacuum caused by the government shutdown.
The bottom line: Three members think rates should end 2026 higher than they are now, while one sees six more cuts coming.
EU Races To "Trump-Proof" Russian Assets
European officials are rushing to indefinitely freeze €210bn in Russian sovereign assets before next week's summit, aiming to bypass Hungarian Prime Minister Viktor Orbán.
Driving the news: The EU fears Orbán—or the incoming Trump administration—could block the renewal of sanctions, collapsing a loan scheme for Ukraine.
The plan:
Brussels plans to invoke Article 122 (emergency powers) to override national vetoes.
This would detach the asset freeze from the broader debate on loans, locking in the funds indefinitely rather than for six-month renewals.
Belgium is demanding "ironclad guarantees" it won't be liable for legal claims if sanctions are lifted.
Meanwhile: President Trump held a call with leaders from France, the U.K., and Germany today amid "growing tensions" over his peace plan, which reportedly demands territorial concessions from Kyiv.
"[They are] weak."
The U.S. plans to require visitors from visa-waiver countries—including the UK, France, Germany, and Australia—to disclose five years of social media history to enter the country.
The details:
The proposal makes social media handles a "mandatory data element" for ESTA applications.
Previously, this was optional or limited to specific visa categories.
Authorities are also eyeing a "selfie" requirement to supplement passport photos.
The friction: The travel industry fears a chilling effect on tourism ahead of the World Cup, while allies are bristling at a U.S. strategy that calls for "cultivating resistance" in Europe.
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