Monetary Policy Outlook - Singapore is expected to maintain its monetary policy unchanged in the upcoming review, supported by strong semiconductor export demand and controlled inflation [1] - Out of 16 analysts surveyed, 15 predict that the Monetary Authority of Singapore (MAS) will not make any changes this week, following previous unchanged settings in July and October [1] Economic Growth - Singapore's GDP growth for 2025 is projected at 4.8%, surpassing the government's earlier forecast of around 4.0% and previous estimates of 1.5% to 2.5% [2] - The electronics purchasing managers' index reading of 50.9 in December indicates sustained momentum in the tech cycle, with AI-related demand and rising memory chip prices expected to benefit the semiconductor sector [2] Inflation and Future Policy Actions - Stable core inflation at just above 1% in November has alleviated immediate pressure for policy easing, with expectations for MAS to tighten policy in April as inflation stabilizes and trade uncertainties diminish [3] - Economists from Bank of America suggest that MAS may tighten policy as soon as the upcoming review, citing signs of strengthening inflation based on December data [4] - MAS is anticipated to raise its core inflation forecast range for 2026 by 50 basis points to 1% to 2% from the current range of 0.5% to 1.5% [4] Price Trends - Recent data indicates that price increases in travel-related and other components have outweighed declines in raw food and beverage prices, which will be reflected in MAS's updated inflation forecasts [5] Monetary Policy Mechanism - Singapore manages its monetary conditions by adjusting the local dollar's value against the currencies of its main trading partners within an undisclosed trading band, known as the Singapore dollar nominal effective exchange rate (S$NEER) [5] - MAS adjusts its settings through three levers: the slope, mid-point, and width of the band [6]

Core Insights - The Procure Space ETF (UFO) significantly outperformed the SPDR S&P 500 ETF Trust (SPY) in 2025, returning 66.36% compared to SPY's 17.72% [2][8] - The space economy is projected to grow rapidly, with McKinsey estimating it will reach $1.8 trillion by 2035, driven by increasing private sector involvement [5][6] - The S&P 500 has shown strong performance over the past three years, with expectations for continued growth in 2026, although a market correction is anticipated [3][4] ETF Performance - The UFO ETF's performance in 2025 is attributed to its focus on premier space startups that are gaining market attention [5] - The ETF's largest holding is Planet Labs at 6.47%, followed by Rocket Lab and AST SpaceMobile at 5.35% [7] Market Dynamics - The number of orbital launches has surged from 102 in 2019 to 324 in 2025, indicating a robust growth trajectory in the space sector [6] - The upcoming leadership change at the Federal Reserve may lead to continued rate cuts, potentially supporting further market gains [4]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the global economic outlook, particularly the recovery in business sentiment and its impact on GDP growth in 2026, with a specific emphasis on the United States and China. Core Insights and Arguments - **Global GDP Growth**: Above-trend global GDP growth is expected to be sustained in the first half of 2026, driven by a recovery in business sentiment and increased non-tech business spending [3] - **Consumer Spending**: Consumer spending has remained resilient, with a projected 2% annualized rise in consumption for the last quarter, supporting GDP and corporate profits [3] - **US Policy Impact**: Recent US policy developments are anticipated to have a different impact compared to last year, focusing on boosting near-term growth rather than disruption [4][11] - **Credit Card Rate Cap**: A proposal to cap credit card rates at 10% could save borrowers approximately $100 billion annually, although it may lead to reduced credit availability [5] - **Housing Market Dynamics**: The directive for government-sponsored enterprises (GSEs) to purchase $200 billion of mortgage-backed securities (MBS) is not expected to significantly impact housing, while a ban on institutional investors buying single-family homes may increase rental costs [12] Important but Overlooked Content - **Geopolitical Risks**: Potential geopolitical flashpoints, such as instability in Venezuela and military actions in the Middle East, could pose risks but are likely to remain localized with minimal impact on business sentiment [15] - **Inflation Trends**: Global core inflation has remained above 3% for five consecutive years, with a recent softening in US core CPI to 0.2% for December, indicating a potential positive supply shock [16][17] - **China's Trade Surplus**: China reported a record $1.2 trillion trade surplus in 2025, with exports increasing by 5.5% despite high US tariffs, reflecting a shift in trade dynamics towards Asia, Europe, and Africa [22] - **Emerging Markets**: Central banks in emerging markets, particularly in Asia, are becoming less dovish, with tightening monetary policies expected in countries like Singapore and Malaysia due to rising inflation [24] Economic Projections - **US GDP Growth**: Projected real GDP growth for the US is 2.2% in 2025 and 2.4% in 2026, with consumer prices expected to rise by 2.5% in 2025 and 2.8% in 2026 [28] - **China's Economic Outlook**: China's GDP growth is expected to be 5% year-on-year for 2025, with a slowdown in export growth anticipated for 2026 due to higher trade barriers [23] This summary encapsulates the key points from the conference call, highlighting the economic outlook, policy implications, and potential risks in the current global landscape.

Core Insights - The 43-day government shutdown has delayed and distorted key economic data, complicating the Federal Reserve's decision-making regarding monetary policy [2][10] - The Personal Consumption Expenditures (PCE) inflation report will not return to its regular schedule until April, covering only October and November data [3][10] - The Consumer Price Index (CPI) was also affected, with October data not collected and November data gathered later than usual, potentially distorting holiday sales data [4][10] Economic Implications - The lack of timely inflation data increases the risk of investors and policymakers being caught off guard when reports are finally released [5][10] - Federal Reserve officials are expected to maintain the current interest rate due to the uncertainty caused by the delayed data [5][10] - Policymakers face a dilemma between keeping interest rates high to combat inflation and lowering them to support the job market [6][10] Data Collection Challenges - The shutdown's effects may persist for months, particularly affecting housing cost measures, as the Bureau of Labor Statistics (BLS) had to estimate changes in rent and home ownership costs [8][10] - A methodological assumption of no inflation in October has led to an understatement of shelter inflation, which may not be corrected until April 2026 [9][10] - The distortion in housing costs could temporarily make inflation appear lower than it actually is, impacting household budgets and inflation calculations [9][10] Current Inflation Trends - Annual core inflation showed a decrease to 2.6% in December from 3% in September, but this may not reflect the true situation due to data distortions [11][10] - The "data blackout" during the shutdown has made it challenging for policymakers to assess the underlying inflation trend [12][10]

Core Insights - Many Americans are entering the new year with uncertainty about their financial futures, with about 40% expressing doubt about having sufficient income and assets for retirement [1] Group 1: Retirement Confidence - A significant number of Americans, approximately four in ten, lack confidence in their ability to retire comfortably [1] - Individuals like Carrie, who have diligently saved for retirement, are now reconsidering their plans due to economic pressures [2][3] Group 2: Economic Pressures - Although inflation has decreased from its peak, costs related to healthcare, housing, insurance, and utilities remain high, impacting those nearing retirement [3] - Rising Medicare premiums and concerns about Social Security's long-term viability are contributing to the uncertainty for future retirees [3][8] Group 3: Demographic Trends - A record number of Americans, estimated at 4.18 million, are expected to turn 65 in 2025, marking the largest wave of retirees in U.S. history [5] Group 4: Market Volatility - Recent policy changes, including tariffs introduced by the Trump administration, have created market volatility, pushing the S&P 500 close to bear market territory [6] - Uncertainty surrounding future monetary policy, particularly with the potential appointment of a new Federal Reserve chair, adds to investor concerns [7] Group 5: Social Security and Medicare - Social Security benefits are projected to increase by 2.8% in 2026, translating to an average increase of $56 per month, but this may be offset by rising Medicare costs [8] - Medicare Part B premiums are expected to rise to $202.90 per month in 2026, up from $185 in 2025, which will be deducted from Social Security checks [8]

Core View - The emergence of Prime Minister Sanae Takaichi, who is critical of the Bank of Japan's (BOJ) rate hikes, is contributing to downward pressure on the yen as she plans a snap election, which could allow for increased government spending and delay BOJ normalization efforts [1] BOJ Rate Expectations - There is a growing sentiment among BOJ watchers that further yen weakness could prompt earlier rate hikes, with 68% of those polled expecting a rate increase every six months, potentially placing the next hike in June or July [2] - Nearly 60% of surveyed economists believe the BOJ has fallen behind in its monetary policy, a view echoed by US Treasury Secretary Scott Bessent, who emphasizes the need for sound monetary policy communication from Japan [3] Inflation and Economic Indicators - Continued yen weakness, exacerbated by negative real interest rates, could lead to excessive inflation momentum, making it difficult for the BOJ to control inflation, which has averaged above the 2% target for four consecutive years [4] - The BOJ's upcoming meeting is expected to result in no change in rates, following a recent increase to 0.75%, the highest in 30 years, which has not alleviated downward pressure on the yen [6] Market Reactions and Future Outlook - Governor Kazuo Ueda must navigate his post-decision remarks carefully to avoid triggering further yen sell-offs, indicating that rates will continue to rise without committing to an immediate hike [5] - Bloomberg Economics anticipates the next rate hike in July, with Ueda likely to maintain a cautious stance during the upcoming election period [7]

Currency Market - The EUR/USD pair fell to a 6-week low, finishing down by -0.08% due to dollar strength, despite initial gains following comments from ECB Chief Economist Philip Lane regarding comfortable monetary policy settings [1] - The dollar is under pressure as the Fed increases liquidity by purchasing $40 billion a month in T-bills, and concerns arise over President Trump's potential appointment of a dovish Fed Chair [2] - The dollar index (DXY) rose by +0.04% after recovering from early losses, supported by stronger-than-expected US manufacturing production and Trump's reluctance to nominate a dovish candidate for Fed Chair [6] Economic Indicators - The US December manufacturing production unexpectedly rose by +0.2% month-over-month, contrary to expectations of a -0.1% decline, with November's production revised upward to +0.3% [4] - The January NAHB housing market index unexpectedly fell by -2 to 37, weaker than the anticipated increase to 40 [3] Japanese Yen Dynamics - The USD/JPY pair fell by -0.35% as the yen strengthened following hawkish comments from Japanese Finance Minister Satsuki Katayama, who indicated readiness for bold action to support the yen [8] - Concerns over the yen's weakness are exacerbated by potential political instability, with reports suggesting a snap election could be called, raising fears of continued expansionary fiscal policy [10] - The yen is also affected by escalating tensions between China and Japan, particularly following China's export controls that could impact Japan's economy [11] Precious Metals Market - February COMEX gold closed down -28.30 (-0.61%), and March COMEX silver closed down -3.810 (-4.12%) due to higher global bond yields and easing geopolitical risks in Iran [12][13] - Demand for precious metals is supported by concerns over the Fed's independence and potential easier monetary policy, as well as ongoing geopolitical risks [16][18] - Strong central bank demand for gold is evident, with China's PBOC increasing its reserves by +30,000 ounces to 74.15 million troy ounces in December, marking the fourteenth consecutive month of increases [19]

Core Viewpoint - The Federal Reserve should be prepared to cut interest rates again due to a fragile job market that could deteriorate quickly [1][3]. Group 1: Labor Market Conditions - The job market is currently near full employment but has become increasingly fragile, with potential for further deterioration in the coming months [3]. - Federal Reserve Vice Chair for Supervision Michelle Bowman emphasized the need for the Fed to remain nimble in its policy approach due to the rapidly changing job market conditions [3]. Group 2: Monetary Policy Stance - Bowman's current assessment of monetary policy is that it is "moderately restrictive," and she advocates for a forward-looking approach in setting interest rates [4]. - The Fed's monetary policy is not on a preset course, and there is a need to avoid signaling a pause in rate cuts without clear evidence of changing conditions [2]. Group 3: Economic Outlook - The baseline expectation is for economic activity to continue expanding at a solid pace, with the labor market stabilizing near full employment as monetary policy becomes less restrictive [2]. - Risks to the Fed's inflation and job mandates are uneven, with expectations that price pressures will moderate as the impact of trade tariffs diminishes [2]. Group 4: Recent Actions and Future Expectations - In late 2025, the Fed lowered its benchmark interest rate by three-quarters of a percentage point to the 3.50%-3.75% range to support a weakening job market while still addressing high inflation pressures [6]. - Fed officials have indicated no urgency to act at the start of 2026, as they seek further evidence that inflation, which remains above the 2% target, will decrease [7].

Going back to the Sunday night with the Powell video being posted, I was more surprised and maybe even disappointed that Bitcoin didn't react because to me that seems like the exact kind of news flow that would enthuse the social mission of Bitcoin. But Bitcoin didn't move very much when it was an outside asset class and deemed kind [music] of like untouchable. It behaved more like the way you expect it as a hedge to like world peace.But now because of the institutionalization of Bitcoin itself. What's goin ...

Core Viewpoint - The ongoing conflict between President Trump and Federal Reserve Chairman Jerome Powell raises significant concerns about the independence of the Federal Reserve and its implications for the U.S. economy and financial security of Americans [1][3]. Group 1: Federal Reserve Independence - Powell revealed that the U.S. Department of Justice threatened him with a criminal indictment related to his testimony about Federal Reserve building renovations, which have exceeded the budget by $700 million [2]. - Powell argues that the indictment threat and accusations of incompetence are pretexts for political pressure, emphasizing the importance of the Federal Reserve's ability to set interest rates based on economic data rather than political influence [3][4]. - The situation has prompted bipartisan condemnation from U.S. Senators, with Democratic and Republican leaders defending Powell and the independence of the Federal Reserve [5]. Group 2: Economic Impact - Following the news of the potential indictment, the dollar weakened and stock futures declined, indicating immediate market reactions to the political turmoil surrounding the Federal Reserve [4]. - The conflict highlights the broader implications for monetary policy and its direction, which could affect economic stability and public trust in financial institutions [3][4].