Daily Brief | August 25 2025

Top News

·     At the annual Jackson Hole summit, central bankers agreed that the Federal Reserve’s independence has become a risk with international implications.

·     Ursula von der Leyen, President of the European Commission, emphasized that the agreement reached with Washington provides stability and prevents a trade war, although she acknowledged it is not perfect and that some tariffs remain.

·     Switzerland is trying to reduce the 39% tariffs imposed by Trump with a new package that includes defense purchases and greater access to U.S. natural gas, in hopes that the U.S. will lower the burden to levels similar to those applied to the EU.

·     Bank of Japan Governor Kazuo Ueda said that wage increases are spreading beyond large corporations and are likely to continue accelerating due to an increasingly tight labor market, reflecting his optimism that conditions are in place for another interest rate hike.

Economic Outlook

At the annual Jackson Hole summit, central bankers agreed that the Federal Reserve’s independence has become a risk with international implications. The meeting, marked by a strong show of support for Jerome Powell —who received a standing ovation when he took the stage— highlighted concerns that President Trump’s pressure to force rate cuts and remove Fed members could undermine the credibility of the world’s most powerful central bank. A Fed retreat on this front would not only jeopardize price stability achieved since the Paul Volcker era, but would also spark greater market nervousness, raising the cost of dollar financing and weakening the role of U.S. Treasuries as a global benchmark. Overall, the message to other monetary authorities was clear: independence should not be taken for granted, as it is the indispensable foundation for sustaining economic stability.

Markets and Stocks

U.S. stock index futures were trading lower this morning after Friday’s sharp rally, when the Dow Jones hit record highs. Investors continue to assess Jerome Powell’s message from Jackson Hole, which opened the door to a rate cut in September, while awaiting Nvidia’s results on Wednesday and the release of the PCE index on Friday. In Europe, markets were mixed, while shares of JDE Peet’s rallied following the acquisition announcement by Keurig Dr Pepper. In Asia, major indexes closed higher, led by China and Hong Kong.

In commodities, oil rose on fears of tougher U.S. sanctions against Russia and attacks on energy infrastructure. In contrast, gold gave up ground after reaching a two-week high, with the ounce at $3,365, pressured by a stronger dollar.

In fixed income, the 10-year Treasury yield rose to 4.28%, while the 2-year stood at 3.73%

Corporate News

– Keurig Dr Pepper announced the acquisition of JDE Peet’s for $18.4 billion. After the transaction, the company plans to split into two publicly listed U.S. firms, one focused on coffee and the other on beverages.

– Intel reported that the U.S. government will take a 9.9% stake in the company, equivalent to $8.9 billion, as part of an agreement funded through the Chips Act. The government will be a passive shareholder with no board seat.

– Verint Systems surged more than 20% in pre-market trading after reports that private equity firm Thoma Bravo is close to finalizing its acquisition for about $2 billion, including debt.