Marketplace Morning Report Hungary shows what happens when central banks lose independence
Aug 29, 2025
The podcast delves into the alarming trend of central bank independence under threat, spotlighting Hungary as a cautionary tale. It highlights President Trump’s controversial moves against the Federal Reserve and parallels them with Hungary’s political dynamics. Meanwhile, consumer sentiment is analyzed through the unexpected dip in Best Buy shares, revealing the complexities of spending amid inflation. Lastly, Hungary's gamble on electric vehicle production raises questions about future economic growth and demand.
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Fed Rate Cut Largely Priced In
- The Fed is likely to cut rates soon if data continues to come in as expected, with markets pricing a September cut at about 85% probability.
- Mortgage rates and 10-year yields dropping signal markets not only expect a cut but find it justified amid political pressure on the Fed.
Tech Spending Stayed Durable
- Electronics spending remained resilient because devices have replacement cycles and some purchases are essential, not discretionary, for many consumers.
- Retail foot traffic from new consoles like Nintendo Switch 2 lifted sales of games and accessories, boosting Best Buy's results despite investor pessimism.
Orban's Early Grip On The Central Bank
- Nick Thorpe traces Viktor Orban's influence over Hungary's central bank back to Orban's 2010 landslide and appointment of ally Gyorgy Matolcsy.
- Matolcsy ran monetary policy in ways that served political aims until conflicts with Orban later forced changes.