Core Viewpoint - Morgan Asset Management predicts that the Federal Reserve will maintain interest rates unchanged at least until the first half of 2026 [1] Group 1: Economic Outlook - The firm expects inflation to accelerate again around mid-2026, reaching its peak due to fiscal stimulus supporting spending and the transfer of tariff costs [1] - Hiring activity is anticipated to receive a temporary boost, alongside weak growth in labor supply, which should help keep the unemployment rate in check [1]

Group 1 - The Japanese REITs market is facing significant challenges due to rising financing costs, which have already led to a slowdown in fundraising activities [1][4] - In the previous year, listed REITs raised only 74 billion yen (approximately 480 million USD), marking the lowest level since 2009 [1] - Concerns over the Bank of Japan's continued interest rate hikes have resulted in a negative sentiment in the market, reflected in the underperformance of the REIT sector compared to the broader market [1][4] Group 2 - The rapid increase in bond yields has raised the potential for higher borrowing and refinancing costs across the REIT industry, despite not all REITs being directly affected [4] - The Tokyo Stock Exchange REIT index has seen a decline of 2.5% since January 20, while the TOPIX index has dropped by 2% following the bond market turmoil [4] - Inflation is increasing the costs for real estate managers, leading to potential asset sales by REITs to mitigate risks, which may further reduce their motivation to raise funds through the stock market [7]

Group 1 - The core viewpoint is that the Bank of Canada may overlook the temporary price increases caused by last year's federal tax rebates, which accelerated the overall inflation rate from an average of 2.2% since September to 2.4% [1] - Dominique Lapointe, a macro strategy director at Manulife Investment Management, indicates that annualized core inflation metrics for 1-month, 3-month, and 6-month periods have all shown a slowdown, suggesting that price pressures remain controlled [1] - Lapointe anticipates that the Bank of Canada will maintain interest rates at its next policy meeting on January 28, and trade uncertainties will likely compel the central bank to remain cautious throughout 2026 [1]

Group 1: Silver and Gold Market Dynamics - The recovery of silver, reaching a recent high of over $93 per ounce, has pushed the gold-silver ratio down to 50, the lowest level since March 2012 [1][6] - Silver prices surged nearly 150% last year, continuing to rise into early 2026, while gold prices remain above $4,600 per ounce, up over 6% this year [7] - The increase in metal prices, geopolitical risks, and threats to the independence of the Federal Reserve are raising concerns about potential inflation acceleration in 2026 [7] Group 2: Inflation Concerns and Market Reactions - The current inflation rate remains stubbornly above the Federal Reserve's 2% target, raising fears that anticipated rate cuts in 2026 may be jeopardized [7][8] - Despite some fund managers taking precautions, broader financial markets have not fully priced in inflation concerns, as evidenced by the slight increase in the 10-year U.S. Treasury yield to 4.16% [2][7] - The market is awaiting Trump's nomination for the new Federal Reserve chair, who is expected to favor significant rate cuts [8] Group 3: Japanese Monetary Policy Outlook - Concerns about the new leadership potentially undermining the independence of the Bank of Japan are prevalent, with the yen's depreciation influencing future policy decisions [9] - A Bloomberg survey indicates that all economists expect the Bank of Japan to maintain the benchmark interest rate at 0.75% during the upcoming meeting [9] - July is seen as the most likely month for the next interest rate hike, with 48% of economists supporting this view [9]

Core Viewpoint - The Federal Reserve Governor Waller supports the FOMC's potential interest rate cut in December for "risk management" purposes, highlighting a weak labor market and stagnant economic conditions [1] Group 1: Economic Conditions - The U.S. labor market remains weak, approaching stagnation [1] - Excluding tariff impacts, core inflation is close to the 2% target [1] - Mid-term and long-term inflation expectations are anchored [1] Group 2: GDP and Housing Market - After excluding the effects of the government shutdown, GDP may slow down in the second half of 2025 [1] - Many households are struggling to afford homes and cars [1] Group 3: Employment Trends - The demand for workers is decreasing at a faster rate than the decline in supply [1] - Many companies are laying off employees or allowing headcount to decrease [1]

Core Insights - The chief economist of Pantheon-Macroeconomics, Gregory Daco, predicts that the U.S. September CPI data will confirm a renewed acceleration in inflation, with significant price momentum observed in both goods and services [1] - The impact of tariffs is becoming increasingly evident, although the transmission process remains slow and uneven [1]

Group 1 - The uncertainty surrounding the ruling party's ability to secure a majority in the upcoming July 20 Senate elections has led to selling pressure on the yen [1] - The yen's exchange rate against the dollar fell to the 149 yen range for the first time in three months, indicating market concerns about the ruling party's potential loss of majority [1] - A survey conducted by the Nikkei on July 13-15 revealed that the ruling coalition's ability to secure the necessary 50 seats has become precarious, raising fears of increased government debt if they need to cooperate with opposition parties advocating for expansionary fiscal policies [1] Group 2 - The U.S. Labor Department reported a 2.7% year-on-year increase in the Consumer Price Index (CPI) for June, up from 2.4% in May, which has cooled expectations for an early interest rate cut by the Federal Reserve [2] - The confirmation of accelerating inflation has contributed to a stronger dollar against various currencies, further exacerbating the selling pressure on the yen [2]