This Week in Review | US Inflation, UK Gov’t Budget, ECB Interest Rate Decision (Sept. 11, 2026)

The episode opens with US inflation data released Friday by the Bureau of Labor Statistics, showing headline CPI unchanged at 3.4% year-over-year while core inflation came in at 2.4%. The hosts note that while inflation has risen from 2.4% pre-conflict levels in February due to Middle East tensions affecting energy prices, the spike has been far less severe than many feared. They emphasize that inflation is fundamentally a monetary phenomenon tied to money supply growth, and with global money supply growth remaining moderate, energy-related pressures should fade over time rather than persist as lasting inflation. The segment cautions investors against overreacting to single monthly reports, stressing that trends matter more than individual data points and that markets are forward-looking, having already priced in economic expectations.

Next, the transcript discusses UK Chancellor John Healey's first major speech in his new role under Prime Minister Andy Burnham (who replaced Keir Starmer earlier in the year). Healey outlined the government's economic vision ahead of October's budget announcement, prioritizing fiscal discipline while framing growth as the sustainable path to healthier finances. The hosts note this speech may have reassured investors concerned about potential anti-business policies or heavy tax increases under the Labour government. They acknowledge upcoming budget anxiety but remind viewers that proposals must still pass through Parliament, and that political divisions within the Labour Party may moderate more radical changes. They also contextualize UK concerns within broader global trends of rising government bond yields affecting many developed markets.

Finally, the episode covers the European Central Bank's Thursday interest rate decision to raise its key policy rate by 25 basis points, the ECB's second hike of 2026. The hosts caution against placing excessive weight on any single central bank decision, arguing that many factors beyond rate changes—including corporate earnings, lending conditions, business investment, and consumer demand—shape markets and economies. They note that eurozone GDP grew in Q2 despite higher borrowing costs and that recent data has beaten expectations. The segment concludes by suggesting that European sentiment remains subdued compared to the US, creating potential for positive surprises if economic reality exceeds already-low expectations.