Core Viewpoint - Deutsche Bank believes that if Hassett becomes the Federal Reserve Chairman, there will be significant obstacles to implementing interest rate cuts, as the economic fundamentals may not support substantial easing by mid-2026, coupled with hawkish resistance within the Federal Reserve Board [1][4][12]. Group 1: Hassett's Potential Role - Hassett is seen as a "loyal" candidate favored by President Trump, who has expressed dissatisfaction with current Chairman Powell's monetary policy decisions [6][7]. - Hassett's background includes a PhD in economics and experience at the Federal Reserve, making him qualified for the role [9]. - His "outsider" status is viewed positively, aligning with calls for an independent review of the Federal Reserve's policies and operations [10][11]. Group 2: Challenges to Rate Cuts - The report highlights three major challenges Hassett would face in pursuing aggressive easing policies: difficulty in achieving internal consensus, economic fundamentals that may not support rate cuts, and a hawkish committee composition [12][13]. - By mid-2026, the U.S. economy is expected to continue steady growth, with limited downside risks in the labor market and inflation rates slightly above target [12]. - The current composition of the Federal Reserve Board is largely hawkish, making it unlikely that members would agree to a clear easing stance, which contradicts the dual mandate of full employment and price stability [14][16]. Group 3: Market Implications - The report emphasizes that the anticipated "rate cut feast" may not materialize, and policy adjustments are likely to be gradual and restrained [15]. - The new chairman will need to demonstrate a commitment to price stability, especially given public calls for lower rates during the transition period [15].

Core Viewpoint - Deutsche Bank suggests that if Hassett becomes the Federal Reserve Chair, his initial policy path may be more hawkish or neutral than expected, making large-scale monetary easing unlikely in the near term [1][5]. Group 1: Hassett's Potential Role - Hassett is seen as a "loyal" candidate to replace Powell, aligning with Trump's desire for a lower interest rate advocate within the Fed [2][3]. - Hassett's background includes a PhD in economics and experience at the Fed, making him qualified for the role [3]. Group 2: Challenges to Easing Policies - Hassett may face significant obstacles in implementing aggressive easing policies, including: - Difficulty in achieving internal consensus within the Fed [5]. - Economic fundamentals may not support rate cuts by mid-2026, as the economy is expected to grow steadily with limited downward risks in the labor market and inflation slightly above target [5][8]. - The Fed's committee is predominantly hawkish, making it challenging for Hassett to push for a clear easing stance [6][8]. Group 3: Market Implications - The report emphasizes that the anticipated "rate cut feast" may not materialize, and any policy adjustments will likely be gradual and restrained [9].

Core Viewpoint - Sanae Takaichi has been elected as the president of Japan's ruling Liberal Democratic Party (LDP) and is expected to become Japan's first female Prime Minister, with her term lasting until September 2027 [2]. Group 1: Election and Political Context - Takaichi won the LDP presidential election held on October 4, 2023, among five candidates, including prominent figures like Toshimitsu Motegi and Yoshihide Suga [2]. - The election victory positions her to likely be elected as Prime Minister during the extraordinary Diet session scheduled for October 15, 2023 [2]. Group 2: Economic Policies and Monetary Stance - Takaichi is viewed as a proponent of "Abenomics," advocating for tax cuts to reduce burdens on businesses and individuals, along with cash subsidies to stimulate consumption and economic growth [3]. - The Bank of Japan maintained its benchmark interest rate at 0.5% in September, and there are indications that Takaichi's administration may still see a potential interest rate hike as early as October [3]. - Takaichi has expressed that the Bank of Japan should independently determine the specifics of monetary policy execution, distancing herself from previous dovish statements [3]. - She has shown caution regarding potential interest rate increases, noting that significant hikes could hinder corporate investments in new technologies [3].