Other influential central banks follow the ECB’s reaction to global inflation, highlighted by Fed Chairman Warsh inaugural press conference. DC lawmaker dysfunction no longer surprises or even titillates, but basic governance failures among and between Republicans and Democrats last week jeopardize summer floor work on national security and financial services topics. This rapidly deteriorating situation manifests something worse than gridlock and suggests months or quarters of futility not in any manner benign.
For two and a half years now strategic equities and egos have precluded western democracies seeking to influence post-war structures in Ukraine and the Middle East from gaining much ground. Friday’s close included sporadic bilateral constructive noise about Hormuz traffic and nuclear proliferation discussions. Resolving this geoeconomic conundrum amounts to more than peanuts minimizing any value of Charlie Brown and Lucy’s football allegory entertainment. Sunday morning DC time reports of Israel again hitting Lebanon’s capital left President Trump little more to say than, “Beirut should not have happened.” Surely not the Happy Birthday greeting he or his staff imagined. The script had only lower tech fighting on the White House lawn (with usual summer afternoon chance of thunderstorms).
Congressional inability to perform basic functions like fiscal and national security duties symptomatically reveal an unwillingness of many in Congress to assert Article One muscle as the Executive Branch takes advantage of narrow-margin unitary government. Poll respondents are not happy. Pew Research Center’s latest tabulation of America’s mood (HERE) reaffirms a sour mood (pp3 and 6), wide political polarization (pp5, 11-13) and a demographic breakout of expected conditions 25 years after our 250-year sovereign anniversary (p14). Evidence mounts potential risks (as well as benefits) from artificial intelligence could quickly subsume comparatively pedestrian policy issues bugging many in the US.
Policy AImpulse. Various AI policy convenings occur this week after an active past week of observations and suggestions released on AI governance, economics, and resource rationalization. Speed of delivery and breadth of research have become a feature of AI policy proposals even if still catching up to the pace of subject technologies. Offerings came from a mix of private companies, government, and nonprofit research groups. Carnegie Endowment researchers stipulate data centers politics capture plenty of headline attention but also note AI durability removes the luxury of policymakers avoiding touch choices about usage of energy and natural resources broadly, concluding “Democracies that rise to the challenge will help determine how AI reshapes the world. Those that do not will have little say in the matter” (HERE),
International Mathematical Union’s Leiden Declaration leans into the notion that AI models, agents, and prompters risk devaluing trust in science absent standards but on the simple theme of showing one’s homework. IMU members warn of risks to peer-reviewed science funding and scientists’ role in contributing to public policy development (HERE).
Anthropic’s co-leader Dario Amodei continued unleashing findings and recommendations to help lawmakers and regulators understand and protect against AI risks. He enunciates the multiple dilemmas posed by technology advancement and abuse, all the while recognizing meaningful upsides to the ever-evolving science. Much of what he would have government do centers on third-party verification of frontier models purpose(s) and risks in five areas: regulation and public safety; macroeconomics and tax policy; scientific innovation; the balance of power between state and society; and geopolitics. Amodei writes that minimizing or preventing job destruction should be job one for policymakers, followed by more comprehensive assurance that AI promotes the greatest good for largest number of humans (HERE).
Trump presidential national security memo on AI usage within the federal government’s national security function differs from the largely voluntary system his revised government-wide AI usage executive order envisioned. This NSPM acknowledges the newest leg of technological advance will control strategic planning and warfare (HERE).
Last week Texas Governor Abbott tasked his public utility commission and independent regulator of electricity to propose legislation and rules to protect residential rate payers from energy inflation attributed to data center operations. That a very conservative governor in deeply red state (to date anyway) feels political heat necessitating household financial protection from a phenomenon few states embraced more openly indicates the socioeconomic threat data centers increasingly pose in the minds of political strategists and their clients (HERE).
OUTLOOK (all times Eastern)
Monday
President Macron hosts G7 Leaders’ three-day conference (Ukraine, Iran, and other matters).
3:30a.m., ECB President Lagarde’s pre-recorded message opens the Bank’s conference Money in Transition: digitalisation and innovation in payments (HERE)
10:00p.m., China macroeconomic data.
11:00p.m., BoJ target rate decisions process begins.
Tuesday
European Parliament set to vote on removing EU duties on many US imports pursuant to July 2025 US-EU trade deal.
China’s two-day Lujiazui Forum gathers top financial services regulators, global central bankers, and finance executives, Shanghai.
The World Bank’s two-day Annual Conference on Development Economics begins in Washington, DC.
5:00a.m., Germany ZEW surveys.
9:30p.m., Reserve Bank of Australia’s Assistant Governor for Financial Systems Brad Jones addresses the Australian Banking Association’s Banking Conference 2026, Melbourne.
Wednesday
The Russia-ASEAN two-day summit is held in Kazan, Russia.
3:15a.m., VivaTech 2026, Europe’s largest tech conference, explores AI economic benefits for three days in Paris (HERE).
2:00p.m., FOMC policy decisions are followed 30 minutes later by Chairman Warsh’s inaugural presser.
2:00p.m., Senate Intelligence Committee consideration of Jay Clayton’s nomination to be the Director of National Intelligence.
Thursday
The European Council two-day summit focuses on the US-Iran conflict, Brussels.
Ukraine Defense Contact Group (aka, Ramstein Group) countries also visit gather Brussels to discuss military support for Ukraine before a meeting of NATO defense ministers.
Germany Ifo economic forecast.
7:00a.m., BoE bank rate decision followed by Governor Bailey presser and Monetary Policy Committee meeting minutes.
7:50p.m., BoJ April meeting minutes.
Friday
China, Hong Kong, Taiwan markets closed to observe Dragon Boat Day.
Australia parliamentary hearing on KPMG’s audit practices.
6:30a.m., Bank of Russia key rate decision followed by Governor Nabiullina’s presser.
