Report published September 7, 2026

Paul Donovan's Daily Audio: Monetary Policy and Forever Wars

UBS · September 7, 2026

Paul Donovan argues that muddled US Fed communication leaves interest rate decisions as a coin toss despite cooling wage pressure. Meanwhile, escalating Middle East tanker attacks pushing oil toward $100/bbl pose a dilemma for central banks that cannot control commodity supply shocks.

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Key Takeaways

1.Market confusion over US rate hikes highlights poor monetary policy communication, as payroll strength was countered by slowly rising unemployment and non-accelerating wages.
2.Attacks on oil tankers by Iran and the US pushed crude close to USD 100/bbl, raising policy questions on whether central banks should induce disinflation in the non-oil economy to counter energy price surges.
3.Germany's AfD is projected to win 44% in Saxony-Anhalt, likely prompting European fiscal responses and increased focus on social media extremism regulation.

Paul Donovan's daily audio: Monetary policy and forever wars
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Report data

Listen to today's 07 September update

Metric	Estimate	Context
Crude Oil Price	100 USD/barrel	Prices approached USD 100/barrel after US and Iran tanker attacks.
AfD Projected Vote Share in Saxony-Anhalt	44%	Germany's far-right AfD party projected election share.