The Weekly Briefing from Capital Economics

A jam-packed episode begins with Group Chief Economist Neil Shearing joining David Wilder to discuss what a surprisingly weak US employment report means for expectations that the Federal Reserve will cut interest rates in September.

Neil and David are then joined by Chief Markets Economist Jonas Goltermann to unpack the implications of coordinated US-Japanese intervention to halt the yen's slide. They discuss everything from Prime Minister Takaichi's policy agenda and its impact on market perceptions of the currency to whether Scott Bessent's move was also intended to send a message to Beijing about an undervalued renminbi.

Finally, Senior Emerging Markets Economist Liam Peach examines the latest update to our EM Financial Risk Indicators, highlighting where we see the greatest risks of a crisis and why, despite the recent energy shock, most emerging markets have remained remarkably resilient.
Related content
How worried should investors be about Takaichi’s policies?
https://www.capitaleconomics.com/publications/japan-economics-focus/how-worried-should-investors-be-about-takaichis-policies
Your questions on Japan’s markets answered
https://www.capitaleconomics.com/publications/fx-markets-update/your-questions-japans-markets-answered
EM Financial Risk Monitor (Jul. 2026)
https://www.capitaleconomics.com/publications/emerging-markets-financial-risk-monitor/em-financial-risk-monitor-jul-2026

Kevin Warsh sent financial markets into turmoil with a press conference that muddied, rather than clarified, the Fed's message. But was the confusion all part of a broader strategy from a Federal Reserve chair who takes a dim view of forward guidance? On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing joins David Wilder to discuss why he doesn't think the new chair deserves the benefit of the doubt, and why clearer communication will be essential if the Fed is to preserve its inflation-fighting credibility.

Also on the show, Chief Europe Economist Andrew Kenningham explains why, despite the horrific scenes unfolding across southern Europe, this summer's wildfires are likely to have only a limited economic impact.
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The renminbi could not rebalance China on its own
https://www.capitaleconomics.com/publications/china-economics-update/renminbi-could-not-rebalance-china-its-own
Little macroeconomic impact of horrific wildfires
https://www.capitaleconomics.com/publications/europe-economics-update/little-macroeconomic-impact-horrific-wildfires

Group Chief Economist Neil Shearing unpacks another turbulent week for the global economy. He talks to David Wilder about the latest escalation in the US trade war, the economic fallout from rising tensions with Iran and higher oil prices and why the AI investment boom continues to reshape growth in the US and China.
Trade war: What's behind the Trump administration's latest tariff announcements and why global trade has remained surprisingly resilient.
Shooting war: After oil $100 a barrel again, what are the implications for inflation and central banks if tensions in the Middle East continue to escalate?
AI boom: How AI investment is now the major driver of growth in both the US and China, and what happens if the boom turns to bust? 

Related content
Fed preview: Rate hikes coming, but not until September
https://www.capitaleconomics.com/publications/us-fed-watch/rate-hikes-coming-not-until-september
Bank of England preview: BoE to hold rates as energy prices keep rate hikes in play
https://www.capitaleconomics.com/publications/boe-watch/boe-watch-boe-hold-rates-energy-prices-keep-rate-hikes-play
What is the future of US tariffs?
https://www.capitaleconomics.com/publications/global-economics-update/what-future-us-tariffs

The collapse of the US-Iran ceasefire has triggered another spike in oil prices and put markets back on edge. Neil Shearing joins David Wilder to discuss whether the world is heading for another oil shock and what it would mean for growth and inflation. He also explains how Kevin Warsh's warning that the Fed has "no tolerance for persistently elevated inflation" could translate into policy.
Also on the show, Julian Evans-Pritchard unpacks China's disappointing Q2 GDP figures, including the role AI is playing in shoring up activity, explains why the People's Bank of China isn't more concerned about slowing credit growth and discusses what to expect on the stimulus front.
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The implications of a renewed closure of the Strait
https://www.capitaleconomics.com/publications/global-economics-update/implications-renewed-closure-strait
Global Economic Outlook: US strength points to renewed policy divergence
https://www.capitaleconomics.com/publications/global-economic-outlook/us-strength-points-renewed-policy-divergence-0
UK Drop-In: The Burnham government – will policy ambition collide with economic reality?
https://www.capitaleconomics.com/events/uk-drop-burnham-government-will-policy-ambition-collide-economic-reality
Why Burnham will struggle to revive UK growth
https://www.capitaleconomics.com/publications/uk-economics-focus/why-burnham-will-struggle-revive-uk-growth

It's far too soon to be worrying about another spike in inflation from renewed fighting in the Middle East. That's one of the key messages from Capital Economics' Global Chief Economist Jennifer McKeown, who joins David Wilder on The Weekly Briefing with Neil Shearing away this week.
Jenny explains what could drive the Fed to raise interest rates as early as September, whether economies on both sides of the Atlantic can continue to hold up and where we think the consensus is wrong on the outlook for interest rates.
Also on the show, in an exclusive excerpt from a recent online client briefing on AI, Chief Economic Adviser Vicky Redwood explains where the technology's impact is already showing up in the data, and what happens to the global economy if AI's promised productivity gains never materialise.
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Capital Economics Key Issues: AI
Drop-In: AI's global shockwaves – Macro and market implications