What a week! The Fed cut rates by 0.25 bps yesterday, as did the BoE, and Trump won with 295 seats to Harris's 226. Inauguration Day is set for Jan. 20. So, what’s the next big story? Perhaps it’s the power struggle at the Fed. Yesterday, Jerome Powell made it clear he’s ready to defend the U.S. central bank from political pressure following Trump’s re-election, stating he wouldn’t resign if asked and asserting that the incoming president lacks the authority to fire him or other senior Fed leaders. “No,” Powell said firmly on Thursday when asked if he would step down at Trump's request.
In China, the CSI closed down 1% as investors debated whether any measures from the National People's Congress Standing Committee meeting would be enough to counter the threat of higher tariffs under Trump’s second term. In Japan, the Nikkei closed up 0.3%, though Nissan Motor shares slumped as much as 10%, touching the lowest level since October 2020, after announcing plans to dismiss 9,000 workers and cut a fifth of its manufacturing capacity due to plummeting net income in the first half.
In other markets, Bitcoin was little changed at $75,986.85, Ether rose 0.9% to $2,921.05, and the yield on 10-year Treasuries advanced by one basis point to 4.34%. West Texas Intermediate crude fell 0.8% to $71.75 a barrel but is still on track for a weekly gain, while spot gold dropped 0.7% to $2,687.20 an ounce. Data-wise, the U.S. Michigan Consumer Sentiment stands out, along with speeches from the BoE’s Pill and the Fed’s Bowman.
