More than two years into the steepest interest-rate tightening cycle in decades (and a long holding cycle since), central banks around the world are grappling with how fast to unwind the policy. Policymakers from South Korea to Canada are weighing progress on slowing inflation, and some have started cutting rates. Policymakers in Latin America have been trimming since earlier this year. While that all marks a major milestone, price pressures have proven stubborn, a strong dollar has roiled developing nations and geopolitical tensions have added a layer of uncertainty to the post-pandemic economic recovery. US Federal Reserve officials will meet next week and are widely expected to hold interest rates steady as the US economy hums along and the labor market keeps firing on all thrusters. But with Labor Department data this week suggesting last year’s payroll gains might not have been as robust as first counted, there’s now the risk that Fed Chair Jerome Powell and his colleagues could keep monetary policy too tight for too long. But even as the Fed’s central bank peers diverge (the en-vogue term for the current unwinding cycle), rate cuts by the European Central Bank and the Bank of Canada “are less bold departures and more like components of a mosaic,” Daniel Moss writes in Bloomberg Opinion. “Harmony has been breaking down for a while.”

Call it the year of elections. Voters in countries representing roughly 40% of the world’s population and its GDP will have elected new leaders before 2024 comes to a close. India’s Prime Minister Narendra Modi proclaimed he’ll remain in office for a third term despite the Bharatiya Janata Party’s loss of its majority in the lower house of parliament. That humbling means it needs to forge a coalition government for the first time since it took power a decade ago. Indian voters it turns out are frustrated by an economic boom that has created a billionaire elite while leaving 600 million residents behind, living on less than $4 a day. In Mexico, opinion polls accurately predicted Claudia Sheinbaum’s landslide win to become Mexico’s first female president, but forecasts failed to pick up her ruling coalition expanding its majority, rattling markets and what had looked like the unwavering appreciation of the Mexican peso. 

Narendra Modi is greeted by supporters as he arrives at BJP headquarters in New Delhi on June 4. Photographer: Manish Swarup/AP

US President Joe Biden delivered a pointed rebuke to two men he’s identified as present-day threats to democracy—Vladimir Putin and presumptive GOP nominee Donald Trump—while in France to mark the 80th anniversary of the D-Day landings in Normandy. “We’re living in a time when democracy is more at risk across the world than any point since the end of World War II,” he said. He doubled down on his decision to allow Ukraine to launch limited strikes just inside Russia with US-made weapons in a bid to keep the Kremlin from taking more Ukrainian territory. Biden also visited the southern US border to announce a severe crackdown on crossings there, a move that may declaw one of Trump’s more potent lines of attack. But while the Democrat defended his executive orders as a humanitarian gesture—given the deadly summer heat that claims many migrant lives—his tack to the right may cause a problem on his left.

New York Governor Kathy Hochul created an uproar by suddenly halting a historic congestion pricing plan for central Manhattan. Her sudden flip-flop is being called a purely political move to shore up Democratic votes in swing suburban districts, a move that may end up punishing the city economy she claims to be protecting. The fee would have been the first in the US and provided some $15 billion to upgrade the city’s creaky public transit system. While many car-driving New Yorkers who don’t live in New York City welcomed her decision, Hochul may have set the stage for another “Summer of Hell” for Big Apple subway riders.

Photographer: Jeenah Moon/Bloomberg

Next month’s UK election will likely be a reckoning for Prime Minister Rishi Sunak, the Conservative Party and its handling of the aftermath of Brexit and the pandemic. It turns out both events have already played a key role in shifting control of some of Britain’s best-known retail chains to foreign hands. High Street retailers are being scooped up by US private equity firms, and now the debt these companies owe may be endangering their financial resilience while putting employees at risk.

Should we trust Sam Altman? In a new, five-episode Bloomberg Podcasts series Foundering, we dive into the question of the OpenAI CEO’s trustworthiness amid a volley of departures and criticisms. Apple, for its part, is expected to announce an agreement with OpenAI next week at its Developers Conference. Meantime, Nvidia’s market cap topped $3 trillion, elevating the chipmaker to the most valuable company behind Microsoft. And Elon Musk’s xAI will build a factory to house a supercomputer in Memphis. Finally there’s “Roaring Kitty,” whose promise to return to YouTube sent GameStop shares on another wild ride. 

Apple’s Tim Cook and Craig Federighi at last year’s WWDC. Photographer: Philip Pacheco/Bloomberg

• Central bank rate decisions in Pakistan, Thailand and Taiwan.
• G7 summit: Argentina’s  Milei cancels but Pope Francis to attend.
• US May inflation print and Fed meeting; stasis  still in play. 
• Criminal proceedings in Hong Kong for Segantii Capital Management.
• EU parliament elections, voters expected to tilt further right.

It’s an echo of the subprime mortgage boom that led to the 2008 financial crisis: a lending model built on packaging seemingly safe loans for borrowers with short track records and small down payments. It’s centered on apartments, with a potential for outsized returns as America’s housing shortage sends rents ever higher. But then interest rates started rising—and investors started going bust.

Photographer: Carolina Moscoso

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