It’s been a long and arduous journey, but the current US monetary tightening cycle is by all accounts at its peak, with a September interest-rate cut by the Federal Reserve a forgone conclusion. But softer economic data caused some on Wall Street and elsewhere to panic Aug. 5, sending markets on a wild ride that less excitable observers noted was largely unnecessary. Disappointing labor data caused markets to plummet on Monday, but by Thursday positive labor data sent nervy investors back to their terminals. Now, all eyes turn to next week’s inflation print to handicap the central bank’s effort to achieve a soft landing that seems oh-so-close.

Traders on the floor of the New York Stock Exchange on Aug. 5 Photographer: Spencer Platt/Getty Images North America

And while repeated, often fevered predictions of a downturn have fallen flat for over two years now, tightening conditions attendant to the Fed’s effort to cool the economy haven’t been painless. The real estate market is plagued by low-inventory and soaring borrowing costs while consumers have been dogged by a spike in prices (some would say gouging) for everything from cars to eggs. As a whole (though not among tech firms that have terminated tens of thousands), businesses scarred by pandemic-era worker shortages have so far largely avoided firings and instead pulled back on hiring, trimmed job openings and reduced hours. In some locations, a surge in migration—furious opposition to which is the central component of Donald Trump’s presidential campaign—has helped ease deep labor shortfalls and thus helped the Fed control inflation. How does all of this play out in an election year? Whether the next three months show Fed Chair Jerome Powell continuing to cool the economy without doing damage may be determinative. 

Minnesota Governor Tim Walz introduced himself to American voters this week as Vice President Kamala Harris’s running mate: a teacher, coach, National Guardsman and former congressman who popularized the attack line that Trump and his running mate James (JD) Vance are “weird.” Walz arguably wasn’t chosen to deliver a crucial swing state—Minnesota has been reliably blue for decades—but as someone with possible appeal across the Midwest. Republicans wasted no time in trying to attack him. Walz, 60, seems up for the fight though, as the Democratic ticket rises in the polls and is pulling in more campaign cash than Trump, 78. The Republican, meanwhile, eager as always to regain the spotlight, held a meandering, falsehood-filled press conference and also changed his mind about debating Harris, 59, a former prosecutor, attorney general and US senator. After having retreated from a previously agreed upon debate, Trump now says he’ll show up.

British authorities and anti-racism campaigners stared down days of violence that erupted after misinformation circulated online about the identity of the suspect in a knife attack that killed three young girls. Prime Minister Keir Starmer called for a “mature conversation” with social media companies to limit malicious content and conspiracy theories, days after far-right billionaire Elon Musk chimed in that “civil war is inevitable” in a post on his social media platform. “Every other tech company would turn down the temperature in this situation, but Musk is cranking up the heat,” said Nu Wexler, the former head of policy communications at Twitter. 

An anti-immigration protest by far-right rioters outside the Holiday Inn Express in Rotherham, South Yorkshire. Photographer: Danny Lawson/PA Images

Ukraine is broadening its surprise incursion into Russia, bringing home the cost of the Kremlin’s war to Russians, many of whom polls show support a war that’s killed tens of thousands of Ukrainians. Russian regions including Belgorod and Kursk have faced drone and missile attacks not unlike those faced by cities across Ukraine since February 2022. Russia declared a state of emergency with as many as 1,000 Ukrainian troops pushing as far as six miles into the Kursk region. The thrust is turning the tables on Putin and exposing the fragility of Russian border defenses. But it may also increase the risk of escalation.

Nobel Prize-winning economist Muhammad Yunus was sworn in as the chief advisor of Bangladesh’s interim government, days after massive, student-led protests forced authoritarian prime minister Sheikh Hasina, who presided over the killings of scores of protesting civilians, to flee the country. The turmoil kicks off a new phase of political uncertainty. Public services in the capital are still mostly suspended. Courts aren’t functioning smoothly. And over the past few weeks, the nation has bled more than $1 billion in foreign currency reserves. But Hasina’s exit doesn’t necessarily mean a happy ending. “What comes after might wind up being worse,” Mihir Sharma writes in Bloomberg Opinion. 

By all accounts, rare instrument collector and German expatriate Bernard von Bredow and his daughter Loreena had built an idyllic life in Paraguay. Then the two were slain inside their home. In the Bloomberg Investigates mini-documentary The Strange Murder of a Rare Violin Collector, we unravel the fallout, uncover the suspects and reveal who was ultimately prosecuted for the shocking killings.

Watch The Strange Murder of a Rare Violin Collector

• Walmart, Home Depot results offer look at health of US consumers. 
• UK economic data: GDP, unemployment, CPI. 
• Wind-up hearings for some troubled Chinese developers.
• India’s Modi gives first speech of third term for Independence Day.
• Thailand’s Constitutional Court rules on PM’s possible removal.

With the Democratic Party’s nomination sewn up and Walz at her side, Harris is experiencing a groundswell of support, having raised a record $200 million in campaign donations in less than a week. The daughter of Black and South Asian parents, she would represent a series of firsts for America if she wins. Polls show voters in swing states reacting positively to her candidacy. But one of the big variables through November will be, as always, the US economy. Watch How Kamala Harris Recharged the Democratic Party.

Watch How Kamala Harris Recharged the Democratic Party Photographer: Emily Elconin/Bloomberg

Dear Weekend Reading readers: A technical issue caused some subscribers not to receive the previous edition of this newsletter. We apologize for the error.

Get Bloomberg’s Evening Briefing: If you were forwarded this newsletter, sign up here to get Bloomberg’s Evening Briefing, our flagship daily report on the biggest global news.