8-26-25: Ukraine Talks Shift from Alaska to the White House

by Louis Navellier

August 26, 2025

In the aftermath of the short Alaska peace summit – where Russian President Vladimir Putin would not agree to a cease-fire – President Trump strongly encouraged Ukraine President Zelensky to “make a deal” and added that “Russia is a very big war power” and they are not. “They’re fighting a big war machine.”

President Zelensky said he would discuss “all of the details regarding ending the killing and the war.”

The next Monday (August 18), leaders of France, Germany, Italy, Britain, Finland, the European Union (EU) and NATO were all at the White House to show support for Zelensky. Interestingly, Zelensky was very complimentary to President Trump this time around, confirming that he wanted to end the war. He even wore a new suit that President Trump complemented him on. Then, our NATO allies agreed to provide Ukraine with security guarantees, so Zelensky can proceed to schedule a meeting with Vladimir Putin to discuss ending the war between Ukraine and Russia. Overall, the White House meeting last week could not have gone better, and President Trump seemed very pleased that progress was being made.

I’d say that these negotiations with European and NATO leaders are a reminder that all parties lose in a war, especially when trying to find a “face-saving” way to end the seemingly endless conflict. President Trump has been very clear that both Russia and Ukraine will continue to be big losers if this war persists.

European leaders were at one time reluctant to admit that Ukraine has lost some territory to Russia, but with up to two million killed or maimed, plus millions in exile, perhaps they can now admit this reality.

September Key Interest Rate Cuts are Now Certain

On CNBC last Wednesday, Allianz chief economic advisor, Mohamed El-Erian, said he believes the Fed should have cut key interest rates at their July meeting. El-Erian said he believes the Fed should cut 0.25% at the September FOMC meeting, largely to boost economic growth and support the labor market.

In contrast to those words – and Powell’s words last Friday – the Fed’s July FOMC minutes, released last Wednesday, said that the majority (“several participants”) had “emphasized that inflation had exceeded 2% for an extended period, and that this experience increased the risk of longer-term inflation expectations becoming unanchored in the event of drawn-out effects of higher tariffs on inflation.”

But the real risk to the global economy is deflation, not inflation. Since May 2022, China has been plagued by deflation, now running at a 3.6% annual pace. China’s population has been shrinking and they are losing households. (This problem exists throughout Asia and Northern Europe, due to a low birthrate).

At the Kansas City Fed Conference in Jackson Hole last week, the central bank heads of Britain, the European Union (EU) and Japan said that the world’s largest economies will increasingly lack the workers they need to power economic growth. European Central Bank (ECB) President Christine Lagarde said that an influx of foreign workers would play a “crucial role” in countering negative demographic trends, but Lagarde failed to add that Europe has done a very poor job of assimilating its foreign workers, and that there is a “clash of civilizations” in many European nations. In America, we tend to assimilate our foreign workers better. Naturally, the Trump administration wants to see more legal immigrants (with green cards) versus illegal workers, so they are acting to make sure the U.S. workforce is strictly legal.

That said, central bankers tend to stock together: Bloomberg reported that ECB President, Christine Lagarde, and Bank of England Governor, Andrew Bailey, supported Fed Chairman Powell, despite the fact that the ECB and Bank of England are already way ahead of the Fed in cutting key interest rates.

One other drama at the Fed is that President Trump on Wednesday called for FOMC member Lisa Cook to resign over accusations of mortgage fraud leveled at her by Federal Housing Finance Agency Director Bill Pulte. Specifically, Pulte urged the Department of Justice to launch a criminal investigation related to Cook’s mortgage records. On Truth Social, President Trump said that Cook “must resign, now!!!”

Since the Fed overseas the banking industry, it would look bad if a Fed official lied on her mortgage application to get a more favorable interest rate by misrepresenting her residency. Cook responded in an e-mail, “I have no intention of being bullied to step down from my position because of … a tweet.” This case sounds similar to the one against Sen. Adam Schiff, who now has a legal defense fund.

As long-term rates decline in America, the housing market is recovering. The Commerce Department announced on Tuesday that housing starts surged 5.2% in July to a 1.428 million pace vs. to a revised 1.358 million annual pace in June. In the past 12 months, new housing starts are up 12.9%. This is good news for the housing industry, as many home-builders are anticipating lower mortgage rates ahead.

In more housing news, the National Association of Home Builders announced on Thursday that existing home sales rose 2% in July to an annual pace of 4.01-million – a big surprise, since economists were expecting a 0.5% decline. In the past 12 months, median home prices have only risen 0.2%, to $422,400.

Earnings season is now virtually over, and economist Ed Yardeni pointed out that with 92% of the S&P 500 reporting earnings, second-quarter earnings have risen by an average of 10.6%. However, the most amazing statistic is that the average earnings surprise was a whopping +8.8%, the strongest earnings surprise rate ever recorded in the 39 years that Yardeni has been following quarterly earnings results!

I should add that Nvidia now has a market capitalization accounting for 3.6% of global GDP, according to Deutsche Bank. Furthermore, according to Deutsche Bank, Nvidia’s market capitalization is now bigger than the entire stock market capitalizations of Britain, France and Germany! Nvidia’s ascension to over $4 trillion in market capitalization has been stunning and swift. Only China, India and Japan have stock market capitalizations larger than Nvidia, so it is very apparent that Nvidia is overpowering the world with its market dominance of AI chips that data centers increasingly demand for all the AI applications.

Navellier & Associates; own Nvidia Corp (NVDA), in managed accounts. Louis Navellier and his family own Nvidia Corp (NVDA), via a Navellier managed account and Nvidia Corp (NVDA), in a personal account.