The Weekly BluRB — September 16th, 2025

Intro: 

Welcome to the Weekly BluRB, a newsletter catered to students and professionals seeking the latest news and insights on global markets. Get prepared for the week by reading four stories circulating around equity markets, macro trends, geopolitics and new business developments. And the best part: we’ll give you an informed view about where we think prices, policy and trends are going in the near future. The content in these writings is for informational purposes only and does not constitute financial or investing advice.

United States: One Big Beautiful Summer — Lucy Cox

Working in Capitol Hill reporting this summer, I typed out “OBBB” so many times I’m pretty sure those letters are forever burned into the screen of my laptop. From fights over the SALT cap to House Minority Leader Hakeem Jeffries protesting the bill for nearly nine hours (setting a record) on the House floor, the politics surrounding its July 4th passage were teeming throughout the summer. And the heated discussions over the bill, especially the intraparty ones, were often not without merit — there are countless provisions in the One Big Beautiful Bill that will impact people and businesses all across the country. From no taxes on tips and overtime, to an increase in defense and border security spending, to raising the SALT cap, the conglomerate of spending provisions in the OBBB is a daunting bill to unpack, and its impacts will soon be felt.

Anduril: One Big Beautiful Beneficiary

The defense and border security industries are getting an extra big beautiful boost in funding to supplement the annual NDAA. The Big Beautiful Bill contains $165 billion for the Department of Homeland Security and approximately $3.2 billion for funding border security technologies. Of these border security technologies receiving a substantial shot in the arm is the developing virtual walls for the northern and southern borders of the US, where surveillance towers can use computers to detect objects of interest, particularly migrants attempting to cross the border illegally. 

According to the bill, towers compliant to receive the funding and placement must be “tested and accepted by US Customs and Border Protection to deliver autonomous capabilities.” Delivering “autonomous capabilities” doesn’t seem like too much to ask in a world where many major cities have driverless taxis, right? Wrong. Currently, there is only one company that can provide the adequate surveillance towers to fit the requirements of the OBBB: Anduril. 

Figure 1: Anduril’s Sentry Towers (Anduril)

Anduril is a privately owned defense tech company founded by an eccentric innovator named Palmer Luckey and funded largely by Peter Thiel’s Founders Fund. The company specializes in creating a “family” of “autonomous” systems powered by Lattice, an AI-powered, open operating system. Among those autonomous systems Anduril has developed are its Sentry Towers, which use AI to identify, detect, and track objects of interest. Currently, these towers are the only technology available that fits the CBP guidelines in the bill, edging out other border security technology competitors with similar products, like Elbit or General Dynamics.

Global Macro: Still More Global Pain? — Faith Spalding

While all eyes remain on the United States Federal Reserve, the global bonds market has hit a 30-year-high. The UK sits at 5.5%, the US at 4.7%, France at 4.3%, Germany at 3.3%, and Japan at 3.2%. These 30-year bond yields are at multi-year highs, and rise as debt prices fall. As this is happening, the spread between developed and emerging market long-term yields has continued to shrink or at least hold steady. For example, India’s 30-year government bond yield holds at 7.2%.

The worry is that a continued incline in developed nations’ bond yield can have a negative impact on the world economy. Because high interest rates are typically negative for equities, profitable long-term global bond yields impact the capital flow of bonds to emerging markets like India, Brazil, or South Korea. More attractive with lower risk, these same markets then face pressure to upkeep their long-term interest rates at a high rate to attract foreign flow of capital. According to RBC Bluebay Asset Management fixed income CIO Mark Dowding, “Every move up in yields leads people to lose a bit more confidence, that pushes yields up further and you end up in a bit of a doom loop.”

France is Getting Frisky

It’s been a testy week for the French government — French Prime Minister Francois Bayrou lost a vote of confidence (that he called for himself), resulting in the total ousting of the central minority government. Now, French President Emmanuel Macron had to choose his fifth Prime Minister in just two years, fresh off of facing criticism for Bayrou’s proposed spending cuts and some tax rises in order to maintain a budget deficit of 5.8% of gross domestic product (GDP) in 2024. It’s not just the French government that is unhappy; French consumers and citizens are livid. From clashes with police officers to reports of fires being set, the French did what they were best at in response to the collapse — protest. 

Ahead of the collapse, European stocks were dragged down late August by lagging French equities, with France’s CAC 40 index plummeting more than 2% in early deals on August 26th. Now, investors are closely looking at credit rating updates, which credit rating agency Fitch kicked off on Friday. The Fitch Agency downgraded France’s credit to A+, the lowest score on record for the country, stripping France of its AA- rating. The agency warned that “political fragmentation” was obstructing fiscal consolidation, specifically referencing a “high and rising debt ratio.” As Moody’s ratings are set to come on October 24th and Standard and Poor’s (S&P) on November 28th, we expect a similarly poor outcome for French credit. 

The shift has major ramifications for the already-struggling French economy; a rating downgrade tends to raise the risk premium investors demand of the government to buy sovereign bonds, with the return on French 10-year bonds rising to 3.47% last Tuesday. Bayrou warned that rising yields were already “unbearable,” indicating newly-sworn Prime Minister Sebastien Lecornu will have a long road ahead of him. 

Japan’s Economic Joust

Despite tariff woes, revised data reveals that Japan’s economy grew at a faster pace than expected for the second quarter of 2025. This is the fifth straight quarter of growth for Japan, where estimates show a GDP expansion of 2.2% in the April-June annually, and 0.5% growth for the quarter. Moreover, private consumption grew 0.4% from the first quarter of the year, 0.2% more than preliminary data estimated. These are stronger numbers at a time of relative global uncertainty, as the effects of the Trump administration’s tariffs on global consumer spending appear to be relatively tampered. While the Bank of Japan was expected to hike interest rates for the October-December period, the resignation of Prime Minister Shigeru Ishiba last week slowed the timeline; as of Monday, the BOJ is cautiously optimistic and is expected to keep rates steady. 

The Bank of Japan is largely concerned with domestic inflation and the impact of U.S. tariffs on the Japanese economy, yet there seems to still be a path forward for US-Japanese cooperation. On September 4th, the Trump administration finalized a framework for the next steps to the US-Japanese trade deal revealed on July 22. In the fledgling agreement, Tokyo has promised Washington $550 billion in Japanese investment, in addition to enhanced access to Japanese markets. In return, Washington agreed to decrease reciprocal and automobile tariff rates from 25.0 percent and 27.5 percent, respectively, to 15%. While there are still kinks to work out, the Trump administration’s September 4th Executive Order, “Implementing the United States–Japan Agreement” has set the deal in motion, alongside a joint statement confirming enhanced market access for US producers on behalf of Japan and pledges from the US concerning stable sector-specific tariffs. 

Figure 2: Annual GDP growth – Japan

While the growth patterns look good, we must remind ourselves that Japanese GDP growth in Q2 was relatively marginal, and we can’t get ahead of ourselves. Throughout the 1960s through the late 1980s, Japan stunned the world with rapid, tech-led industrial growth. Lagging in the 90s after the 1980s asset bubble burst, Japanese economic policy has since relied upon low interest rates and targeted subsidies to usher in growth. These policy choices tend to act as anti-recessionary safeguards, but also promote a heavy reliance on government intervention, which can blunder growth in the long run. 

Story of the Week: Turmoil at the Fed — Faith Spalding

It all comes down to Wednesday: The Federal Reserve is widely expected to cut interest rates as the two-day meeting of the Independent Central Bank concludes. While more mystique than usual surrounds the meeting, it’s near-certain that the Central Bank will cut its benchmark interest rate by a quarter-point to a range of 4% to 4.25%. 

The expected cut comes as the jobs market barely treads water, with revised reports from the Bureau of Labor Statistics revealing that the US economy created 911,000 less jobs in the twelve months from March than previously expected. While last Tuesday’s numbers are preliminary, the report comes on the heels of an incredibly weak August jobs report of only 22,000 new jobs added. Moreover, the current unemployment rate is 4.3%, the highest level in four years. This complicates the picture for the Fed; while the rate cuts are intended to boost the job market and lower borrowing costs, inflation remains higher than the 2% annual goal rate.

The Fed has an explicit dual-mandate: keep inflation low and keep employment high. Recent numbers from the Bureau of Labor Statistics indicate that the Consumer Price Index (CPI) rose 2.9% annually in August, higher than July’s 2.7% increase. While the Trump administration’s wide-ranging tariffs defied inflation projections for the majority of 2025, the rising CPI indicates that tariffs are hiking prices up. Among the price surges, heavily imported goods saw the steepest increases — the price of coffee has increased 21.9% on the year this August, and food prices have increased 3.9% from last year. US retail sales data for August is due Tuesday, but it’s important to note that US consumer retail spending remains somewhat unaffected by tariffs. Still, inflation fears are being overshadowed by the continued downturn in monthly jobs added. As such, after nine months of holding the interest rate steady, we expect the Federal Reserve to announce the crucial rate cut Wednesday. 

Figure 3: Tracking US Inflation – The Average Price of Coffee

Presidential Pressure

Wednesday’s expected cuts come after months of back-and-forth between President Trump and Federal Reserve Chair Jerome Powell. President Trump has repeatedly called for the Fed to slash interest rates, publicly calling out Mr. Powell and other members of the Fed Board. Most recently, the Trump administration moved to fire Lisa Cook, a governor on the board of the Federal Reserve, over allegations of mortgage fraud dating back to 2022. Ms. Cook has not been charged with any wrongdoing and has not been convicted of any crime, but is accused by the Trump administration of falsifying records on her mortgage applications. However, documents in a new court filing call allegations against Ms. Cook into question. A loan record obtained by the New York Times “suggests that Ms. Cook did not try to deceive lenders about one of the properties, a home in Atlanta, that she purchased before joining the nation’s central bank in 2022.”

These revelations come after the federal government filed an emergency request Thursday with the US Court of Appeals for the District of Columbia to uphold Ms. Cook’s firing, despite a lower court striking down the move two days earlier. Ms. Cook’s legal team has continued for her to remain on the board and eligible to vote at Wednesday’s meeting. Particularly, her team stresses that the baselessness of the allegations supporting her firing are posed to add to a growing lack of confidence in the central bank. While these new disclosures do not appear to be legal documents, they do reveal Ms. Cook communicated her intended use of property to her lender at least once. 

The President asked the appeals court to provide a ruling “by the close of business Monday,” ahead of the Tuesday meeting of the Federal Open Market Committee, which includes the Board of Governors. It’s clear that the Federal Reserve is facing pressure from the Trump administration, and must remain independent in order to maintain consumer faith in the Central Bank and US economy. This week is sure to be a test. 

As of late Monday, the US Court of Appeals for the District of Columbia denied President Trump from trying to block Ms. Cook from participating in this week’s central bank meeting. Ms. Cook, as of now, will remain on the Fed Board and will be allowed to cast a vote this week on interest rates.