Core Viewpoint - The recent actions by the Trump administration against the Federal Reserve have raised expectations that Jerome Powell may remain on the board after his term ends in May, potentially creating a powerful counterbalance within the Fed, despite Powell's reluctance to take on such a role [2][3]. Group 1 - The issuance of a grand jury subpoena to the Federal Reserve by the Justice Department is seen as an unprecedented move, indicating Trump's attempt to influence monetary policy [2]. - Powell's supporters and Trump's opponents may welcome the possibility of Powell staying on the board, but analysts suggest this could create confusion in the markets regarding who holds real power and the direction of interest rates [3]. - Powell's strong rebuttal to the subpoena has led to widespread speculation about his potential decision to remain on the board, despite previous expectations that he would leave [5][4]. Group 2 - The potential appointment of a new chair by Trump could be complicated by the strong opposition to the subpoena, with key Republican senators vowing to oppose any nominations until the situation is resolved [7]. - The impact on monetary policy is currently viewed as limited, with the Fed having recently lowered the benchmark interest rate by 25 basis points for the third consecutive time, while signaling a possible pause in rate changes pending more data [8]. - If Powell chooses to stay, it would delay Trump's ability to nominate another member to the seven-person board, which holds significant power over personnel and regulatory decisions [9].

Market Overview - The market this week was driven by two main themes: the investigation rumors surrounding Federal Reserve Chairman Jerome Powell and the fluctuating geopolitical situation regarding Iran, impacting gold, silver, and oil prices [2][3] - The US dollar index faced initial pressure due to political uncertainty but later strengthened, supported by better-than-expected economic data and reduced rate cut expectations, aiming for a third consecutive week of gains [2] - Gold prices reached a historical high of $4642.85 per ounce before settling at $4583 per ounce, while silver peaked at nearly $93.70 per ounce, marking a nearly 30% increase this year [3] Federal Reserve Insights - Concerns over the independence of the Federal Reserve have led to speculation that it may adopt a more hawkish stance, as indicated by various financial institutions [5] - Multiple Federal Reserve officials emphasized the need to maintain independence and base decisions on data rather than political pressure, with some suggesting that current economic data does not support immediate rate cuts [12][13] Geopolitical Developments - The geopolitical situation in Iran has seen a temporary easing, with the US indicating a reduced likelihood of large-scale military action, although military readiness remains [14][15] - Diplomatic efforts from Middle Eastern countries have contributed to the de-escalation of tensions, with the US maintaining a stance of observing Iran's actions closely [15] Investment Strategies - The introduction of dynamic margin requirements for precious metals by CME is expected to increase market volatility, particularly affecting high-leverage traders [16] - The National Grid of China plans to invest 4 trillion yuan in the construction of a new power system during the 14th Five-Year Plan, marking a 40% increase from the previous plan [21] Corporate Earnings - Major banks such as Goldman Sachs and Morgan Stanley reported strong quarterly earnings, driven by a rebound in investment banking activities and robust trading revenues [27] - TSMC reported a record net profit of NT$505.7 billion (approximately $16 billion) for Q4 2025, with a 35% year-on-year increase, attributed to strong demand for AI-related chips [24]

Group 1 - The independence of the Federal Reserve is deemed crucial for economic stability, with Hassett committing to uphold this independence if appointed as the Fed Chair [1] - Hassett acknowledged that Kevin Warsh and Rick Rieder would also be excellent candidates for the Federal Reserve Chair position [1] - Regarding the investigation into the Federal Reserve's headquarters construction cost overruns, Hassett expressed that there would likely be no significant findings impacting the Fed's operations or Chair Powell [1] Group 2 - Hassett announced that Trump will unveil a significant housing finance plan at the World Economic Forum in Davos, allowing individuals to use part of their 401(k) retirement funds for home down payments [2] - The plan aims to enable homebuyers to withdraw funds from their 401(k) accounts for down payments while allowing a corresponding portion of home equity to be reallocated back into their retirement accounts [2] - The government is currently in discussions with major banks regarding credit card issues, hinting at the introduction of powerful new credit card offerings without the need for Congressional legislation [2] - Hassett indicated that policies related to mortgage-backed securities (MBS) are focused on reducing mortgage spreads to alleviate housing financing costs [2]

Core Viewpoint - The People's Bank of China (PBOC) released December financial data indicating a mixed performance in credit growth, with corporate lending showing strength while household demand remains weak [1][2]. Group 1: Social Financing and Loan Data - New social financing in December was 2.2 trillion yuan, a year-on-year decrease of 646 billion yuan, with a stock growth rate down 0.2 percentage points to 8.3% [1]. - New RMB loans amounted to 910 billion yuan, an increase of 80 billion yuan year-on-year, with a stock growth rate of 6.3%, down 0.1 percentage points from the previous month [1]. - Corporate loans saw a significant increase, with new corporate loans of 1.1 trillion yuan, up 580 billion yuan year-on-year, attributed to a low base from the previous year and policy support [2][3]. Group 2: Household Loan Demand - Household loans continued to show a year-on-year decrease, with a net reduction of 92 billion yuan in December, down 442 billion yuan year-on-year, indicating persistent weak consumer demand [2]. - Short-term household loans decreased by 161 billion yuan year-on-year, marking the third consecutive month of decline, while medium to long-term loans also saw a reduction of 290 billion yuan, reflecting a lack of recovery in housing credit demand [2]. Group 3: Government Debt and Social Financing Growth - The slowdown in social financing growth was primarily due to a seasonal mismatch in government debt issuance, with new government bonds decreasing by 1.1 trillion yuan year-on-year [2]. - Despite the December decline, government debt issuance for the year increased by 2.5 trillion yuan, accounting for 39% of the total social financing increase for the year [2]. Group 4: Monetary Policy Signals - The PBOC announced a 0.25 percentage point reduction in the interest rate for structural monetary policy tools, which is expected to contribute approximately 0.5 basis points to bank interest margins [4]. - The expansion of structural tools includes a total of 1 trillion yuan for agricultural and small enterprise loans, and an increase in the quota for technology innovation loans to 1.2 trillion yuan [4]. - The PBOC indicated that there is still room for further interest rate cuts and reserve requirement ratio reductions, with expectations of a 0.5 percentage point cut in the reserve requirement ratio and a 10-20 basis point cut in interest rates throughout the year [4]. Group 5: Market Outlook - The banking sector is expected to have sufficient credit project reserves for January, with credit issuance anticipated to remain stable or increase year-on-year [5]. - The weak demand for retail credit persists, linked to sluggish consumer and real estate demand, while demand in infrastructure and manufacturing sectors remains robust [5].

Core Viewpoint - The situation regarding the U.S. interest in acquiring Greenland has been described as "unusual" by Russia, with ongoing monitoring of the developments from an international law perspective [2]. Group 1: U.S. Actions and Statements - President Trump has been advocating for the acquisition of Greenland, citing national security concerns and the need to counter perceived Russian threats [2]. - Trump has expressed a disregard for international law, stating that only his own moral compass can guide his decisions [2]. Group 2: International Reactions - The Kremlin spokesperson, Peskov, indicated that the situation is evolving along a different trajectory and that Russia, along with other countries, will observe the developments [2]. - Denmark's Foreign Minister described recent talks with the U.S. as "frank but constructive," although no diplomatic breakthroughs were achieved [2]. - NATO member countries, including Denmark, Germany, France, Sweden, and Norway, confirmed participation in joint military exercises named "Operation Arctic Endurance" to strengthen military presence in Greenland and its surroundings [3]. Group 3: Russian Position - Russia's Foreign Ministry spokesperson, Zakharova, rejected claims that Moscow poses a threat to Greenland, accusing the West of double standards [3].

Market Overview - The market this week was influenced by two main themes: the investigation rumors surrounding Federal Reserve Chairman Jerome Powell and concerns over the "independence of the Federal Reserve," impacting the dollar and interest rate expectations; and fluctuating geopolitical news related to Iran, leading to volatility in gold and oil prices [1] - The dollar index faced pressure early in the week due to political uncertainty but later strengthened supported by better-than-expected U.S. economic data and reduced expectations for recent rate cuts, aiming for a third consecutive week of gains [1] - Gold prices initially surged to a historical high of $4642.85 per ounce due to geopolitical tensions and uncertainty regarding Federal Reserve policies, but later entered a consolidation phase, closing at $4583 per ounce [1] - Silver saw a significant increase, peaking at nearly $93.70 per ounce, with a year-to-date rise of nearly 30%, although it experienced extreme volatility [1] Non-U.S. Currencies - The "high market trading" led to the Japanese yen falling below the 159 mark against the dollar, reaching its weakest level since July 2024; the euro and pound showed slight weakness while the Australian dollar remained relatively stable [2] - Oil prices were primarily driven by news related to Iran, initially rising due to concerns over internal unrest but later retracing gains as U.S. political statements eased tensions [2] Investment Bank Insights - Lloyds Bank suggested that the Federal Reserve might become a scapegoat for the weak U.S. job market; UBS indicated that concerns over the Fed's independence could lead to a more hawkish stance [5] - Goldman Sachs noted that the Fed would continue to make decisions based on data, unaffected by investigation pressures; Morgan Stanley stated that inflation remains above target, insufficient to support a rate cut in January [5] Major Events - Trump criticized Powell again, claiming he is either incompetent or corrupt, amidst a backdrop of a criminal investigation into Powell, which has drawn support for him from global central bank leaders [6] - The Senate Majority Leader questioned the investigation's legitimacy, emphasizing the importance of the Fed's independence [7] - The December CPI data indicated a strong signal of cooling inflation, leading to increased market bets on early rate cuts, although Fed officials warned against premature easing [8] Corporate Developments - TSMC reported a record net profit of NT$505.7 billion (approximately $16 billion) for Q4 2025, a 35% year-on-year increase, driven by strong demand for AI-related chips [24] - Apple and Google reached a potential $5 billion AI partnership, opting for Google's Gemini model over OpenAI, impacting the competitive landscape in AI technology [26] - Tesla announced a shift from a one-time purchase model for its Full Self-Driving (FSD) feature to a subscription model, aiming to create a more stable revenue stream and lower entry barriers for consumers [28]

Group 1 - Israeli Mossad Chief David Barnea arrived in the U.S. for discussions regarding the situation in Iran, focusing on protests and potential U.S. military actions against the regime [1] - Barnea is expected to meet with U.S. Special Envoy Wittekov in Miami, who has been in contact with Iranian Foreign Minister Zarif during the protests [1] - Israeli Prime Minister Netanyahu requested President Trump to delay military action against Iran to allow Israel more time to prepare for potential retaliation [1] Group 2 - U.S. military is deploying additional defensive and offensive capabilities to the region, including the USS Lincoln aircraft carrier and its strike group, along with more defense systems and possibly submarines [2] - Iranian Foreign Minister Zarif proposed a meeting to resume nuclear negotiations, raising concerns in the Israeli government about Iran using such talks to buy time and alleviate U.S. pressure [2] - Some officials believe the current crisis may force the Iranian regime to make concessions on its nuclear program, missile program, and proxy organizations that it previously rejected [2]

Core Viewpoint - The article discusses the challenges faced by Federal Reserve Chairman Jerome Powell as he contemplates his future amid pressures from the Trump administration and potential threats to the independence of the Federal Reserve [1][2][3]. Group 1: Powell's Position and Decisions - Powell, at 72, is faced with a choice between returning to personal interests or remaining at the Federal Reserve to protect its independence from the Trump administration [1]. - His term as Chairman ends in May, but he has two more years on the Board, allowing him to influence monetary policy and significant changes [1]. - Powell has not disclosed his future plans, focusing instead on his remaining duties as Chairman [1]. Group 2: External Pressures and Risks - Recent events have highlighted risks for the Federal Reserve, including threats of criminal charges against Powell from the Justice Department, which he views as an attempt to exert pressure on monetary policy [2]. - Powell's unusual video address, which has garnered nearly 1.2 million views on YouTube, marks a significant response to ongoing pressure from Trump [2]. - The relationship between Powell and Trump has been fraught, with Trump publicly criticizing Powell shortly after his appointment [5][7]. Group 3: Institutional Dynamics - If Powell chooses to remain on the Board after his Chairmanship, it would break a long-standing precedent where former Chairs typically resign [4]. - The Federal Reserve Board consists of seven members with staggered 14-year terms, designed to limit presidential appointments [4]. - The balance of power within the Board is crucial, as the appointment of new members by Trump could significantly influence future policy decisions [6][9]. Group 4: Future Implications - The ongoing scrutiny and potential changes in the Federal Reserve's structure could lead to new rules and pressures affecting its operations [3][6]. - Powell's decision to stay could mean enduring significant pressure, but it may also be seen as a necessary step to maintain the Fed's independence [5][11]. - The upcoming months will be critical for Powell and the Federal Reserve as they navigate these challenges and the implications for U.S. monetary policy [8][11].

Core Viewpoint - Maria Corina Machado, a Nobel Peace Prize laureate, gifted her medal to U.S. President Donald Trump, a move that has been met with disbelief and criticism from Norwegian media and experts [1][2] Group 1: Reactions and Opinions - Janne Haaland Matlary, a professor at the University of Oslo, described the act as a profound disrespect to the Nobel Prize, labeling it "meaningless" and "sad" [1] - Raymond Johansen, a member of the ruling Labour Party and former mayor of Oslo, expressed that the award's politicization could legitimize "anti-peace" actions or forces [2] Group 2: Context and Significance - Machado stated that the medal was given to recognize Trump's unique commitment to the freedom of the Venezuelan people, amidst her exclusion from the power transition in Venezuela since the U.S. military's actions in January [2] - The Nobel Peace Prize is one of the most prestigious awards for diplomatic efforts, established according to the will of Alfred Nobel, the inventor of dynamite [2]

Core Viewpoint - The energy market is experiencing significant volatility due to geopolitical tensions involving Iran and the U.S., with traders concerned about potential military actions and their impact on oil supply [1]. Group 1: Market Reactions - Oil prices surged to multi-month highs earlier in the week amid speculation of imminent attacks on Iran, but dropped sharply as President Trump appeared to back off from military action [1]. - Traders are preparing for further price fluctuations, influenced by both oversupply and geopolitical tensions that could disrupt supply [1][3]. - The market's reaction to geopolitical events has been swift, with price increases followed by rapid sell-offs when fundamental conditions remain unchanged [3]. Group 2: Supply and Demand Dynamics - Despite geopolitical concerns, there have been no significant changes in oil production from key Gulf producers, and supply from the Gulf to international markets remains stable [3][4]. - The outlook for oil prices is contingent on whether geopolitical tensions escalate to disrupt Iranian oil production, which currently stands at approximately 3 million barrels per day [3][4]. Group 3: Price Predictions - Analysts predict that oil prices will be supported by global economic acceleration, with Brent crude oil price forecasted to reach $75 per barrel by year-end, representing a 16% premium over current levels [5][6]. - Geopolitical events are expected to prevent significant price declines, but anticipated oversupply is likely to hinder substantial price rebounds [6][7]. Group 4: OPEC's Position - The situation in Venezuela raises questions about OPEC's influence on oil supply and how it will respond to potential increases in Venezuelan production under U.S. control [7]. - Analysts are curious about OPEC's strategy in managing production quotas and its response to the shifting dynamics of member countries' oil sectors [7].