Putin relishes his prisoner swap deal

Russia and the West did the largest prisoner exchange since the Cold War [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. The [largest prisoner exchange]( between Russia and the West since the Cold War was a rare example of everyone getting what they wanted. Still, Vladimir Putin has particular reason for satisfaction today. He extracted [an assassin]( and seven undercover agents from American and European prisons by demonstrating his willingness to [pile up hostages in jail]( until US President Joe Biden gave him the deal he sought. The Russian president showed his spies abroad that silence and loyalty will be rewarded if they’re caught. And he reveled in [casting Germany and other US allies]( as secondary actors in the main negotiation between Moscow and Washington. So far, so predictable in the us-versus-them world triggered by Putin’s 2022 invasion of Ukraine. But he also put down a potential signal of a readiness to seek a way out. The scenes of Biden and Vice President Kamala Harris welcoming home Wall Street Journal reporter Evan Gershkovich and the other Americans were a big win for the Democrats after the tumult over the president’s withdrawal from November’s election. WATCH: Biden and Harris welcome Gershkovich, Paul Whelan and Alsu Kurmasheva at Joint Base Andrews in Maryland. Source: Bloomberg Biden showed he remains in charge and Harris got reflected glory as his potential presidential successor. Her opponent Donald Trump, who’d boasted that Putin would release Gershkovich for him if he regained the White House, was left to carp from the sidelines. Before Biden withdrew, Putin said that he’d prefer to see him reelected. The Kremlin views him as more predictable and certain to abide by agreements. The deal for the prisoner exchange set aside emotion and principle for hard-nosed pragmatism. Both sides showed they could get the job done. For Putin, that was a marker for resuming the approach in seeking to resolve [Russia’s war on Ukraine]( and the confrontation with the US if he faces a Harris White House after November. — [Anthony Halpin]( This image distributed by the White House shows Gershkovich, left, Kurmasheva, right, and Whelan, second from right, aboard a plane from Ankara, Turkey, yesterday. Source: White House/AP Photo Please note: Our email domain is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. Update your contacts to ensure you continue receiving it — check out the bottom of this email for more details. Global Must Reads As Russia’s war on Ukraine stretches deep into a third year, some of Kyiv’s backers are growing concerned about how much decision making is [concentrated in the hands]( of Andriy Yermak. The one-time film producer has become the sole gatekeeper to the president with a direct say in everything from foreign policy to military planning. The concerns about Yermak are surfacing at a perilous moment for President Volodymyr Zelenskiy, with Ukraine struggling to fend off a renewed Russian offensive and bracing for the next winter with its energy infrastructure in tatters. Yermak, front second left, and Zelenskiy, front center, with world leaders during the Summit on Peace in Ukraine in Switzerland in June. Photographer:  Michael Bulholzer/Pool/AFP/Getty Images Biden told Israel’s Prime Minister Benjamin Netanyahu to agree to a cease-fire with Hamas as the White House’s frustrations over the continuation of the war in Gaza grow. While the president pledged in a call yesterday to support Israel against renewed threats from Iran and allied militias such as Hezbollah, he said he was “[very direct]( with Netanyahu, with the regional fallout from the almost 10-month-old war worsening. An influential Chinese central-bank adviser delivered a rare critique of his nation’s economic policy, [urging the government]( to set a compulsory target for inflation and step up spending to address weak consumption. Separately, Hu Xijin, the former editor-in-chief of China’s state-backed Global Times, has been [barred from posting on social media]( after he wrote about the economy, a source says. Prime Minister Keir Starmer got a fillip yesterday from the Bank of England, which cut the benchmark interest rates for the first time in four years and upgraded its growth outlook for the UK. But the lowering of rates from their highest level since 2008 [came with a veiled warning]( that Chancellor of the Exchequer Rachel Reeves mustn’t overstimulate the economy and risk reigniting inflation in her first budget on Oct. 30. North Korea’s propaganda apparatus is breaking new ground in the way it has portrayed leader Kim Jong Un battling alongside ordinary citizens to tackle a flood emergency that has devastated a northwestern area of the country. State media photos [attempt to convey the message]( that Kim cares deeply for his people and their unusual hands-on settings may also be intended to enhance the cult of personality around him. Pita Limjaroenrat, who led Thailand’s reformist Move Forward Party to an electoral victory last year but was thwarted from forming a government, told us that the country is at [risk of instability]( as its courts prepare to rule on whether to dissolve his party and if the prime minister should be removed. A clampdown by Nigerian security forces on protests against the high cost of living in Africa’s most-populous nation [left at least 13 people dead](. Chinese President Xi Jinping called on Hong Kong entrepreneurs to boost China’s development in a letter the financial hub’s business community welcomed as a [sign of encouragement](. Taiwan said it’s having difficulty sending staff to its representative office in Macau because the special administrative region’s government is demanding they [sign a commitment]( to the “One China Principle” to get a visa. Washington Dispatch Harris’ surging popularity and shortening odds the Federal Reserve will soon start cutting interest rates are dealing a double blow to [so-called Trump trades](. Since Biden declared he wouldn’t seek a second term and Democrats united behind the candidacy of the vice president, strategies seen benefiting from a Trump victory [have lost steam]( with the dollar stagnating, Treasuries rallying and Bitcoin sliding. Polls now [suggest a dead heat]( between Harris and Trump in swing states, handing markets a harsh reminder of the dangers of betting on political events. Just weeks ago, an assassination attempt and doubts over Biden’s age were seen as helping Trump, who would be expected to embrace looser fiscal policies, higher trade tariffs and softer financial regulation if he returns to the White House. The markets aren’t solely reacting to the electoral outlook. Fed Chair Jerome Powell [suggested this week]( the central bank could pare rates as soon as September. Meanwhile, Harris [raised a record]( $310 million in July, according to her campaign, more than double Trump’s $138.7 million. One thing to watch today: Forecasters anticipate a report on the US labor market in July will show moderating job and wage growth, [underscoring an ongoing softening](. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day The world is in desperate need of the high-voltage cables that transfer electricity hundreds of kilometers under the sea and are essential to the transition from fossil fuels to cleaner energy. Yet rising prices and scarce supplies show how advances in technology — including renewable power and electric ­vehicles — [face limitations]( because of the production capacity of old-school industries. And Finally A single arched concrete block juts out of a field in Senegal where R&B singer Akon first laid the foundation stone for his planned $6 billion metropolis four years ago. The West African nation granted the artist 136 acres of land on its Atlantic Coast in 2020 to build Akon City — envisioned as a real-life Wakanda, the fictional country from Marvel Studios’ Black Panther films — with condominiums, amusement parks and a seaside resort. Today, goats and cows graze the deserted pasture 60 miles south of the capital Dakar, and authorities [are growing increasingly impatient]( with the American-Senegalese artist. A digital rendering of Akon City. Source: Hussein Bakri/BAD Consultant/Semer Group Pop quiz (no cheating!) Authorities in which country arrested an official over allegations of leaking defense intelligence that included a list of secret agents posted abroad? Send your answers to [balancepower@bloomberg.net](bbg://screens/Mailto%3Abalancepower%40bloomberg.net). 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