Did you know that Taiwan produces about 90% of the world's most advanced chips, which are critical for everything from mobile phones to defense systems?

This fact highlights the importance of Taiwan in the global supply chain, and why China’s increasing pressure on Taiwan should concern everyone.

In this issue, we look at these three topics:

• Are Trump’s Taiwan Threats Serious? First, Trump's recent comments about Taiwan have spooked investors and raised concerns about the stability of the global economy 😨

• ECB Holds Rates Steady Amid Persistent Inflation: Next, the European Central Bank has decided to keep interest rates unchanged despite persistent inflation in the eurozone 🏛️

• Trump Continues To Confound: Finally, the unpredictable nature of Trump's political strategy continues to baffle analysts 🤔

Stay informed with our latest insights and analyses. Y’all ready?

Are Trump’s Taiwan Threats Serious? 😨

Former President Trump's recent comments about Taiwan have rattled investors, with chip stocks taking a hit on Wednesday.

Trump declined to assure U.S. protection for Taiwan against Chinese aggression if re-elected, stating, “They did take about 100% of our chip business,” and suggesting Taiwan should pay for defense.

China sees Taiwan as a breakaway province, and Trump's remarks might signal a lack of U.S. support, reducing deterrence against invasion.

Taiwan produces 90% of the world's advanced chips, which is crucial for various industries.

The U.S. aims to boost domestic production through the Chips Act, but current efforts can't replace Taiwan's output.

Trump's comments are likely political rhetoric, but the risk of severe economic fallout remains a concern for corporate leaders 😬

ECB Holds Rates Steady Amid Persistent Inflation 🏛️

The European Central Bank kept interest rates unchanged last Thursday after lowering them for the first time since the Covid-19 pandemic last month.

Since that cut, which was flagged well in advance, inflation in the 20-nation euro region has remained sticky and the Federal Reserve hasn’t followed suit with any reductions.

While investors expect the Fed to start cutting soon, the ECB won’t want to get too far ahead of its U.S. counterpart because it might weaken the euro too much and drive up inflation again 📈

Led by President Christine Lagarde, the ECB kept its key rate at 3.75% this month.

It will now take a break over the summer and reconvene for its next policy decision on September 12—a week before the Fed is widely expected to make its first quarter-point cut.

Lagarde left the door open to another ECB rate cut that month, too.

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Trump Continues To Confound 🤔

It’s very likely that the Trump’s GOP no longer will have a political philosophy beyond what is in the former President’s head.

The party’s economic platform is a contradictory mix of tax cutting and tariff raising.

Mr. Trump wants to unleash animal spirits but named a running mate who supports union leaders more than business employers.

He wants to end foreign wars but has offered no specific ideas for how to do it.

We’ll know Mr. Trump’s policies when we see them 🤷

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