Watch Live: Trump Makes Announcement At Mar-A-Lago With Secretary Of War Pete Hegseth

President Trump is scheduled to make a public announcement at 4:30 p.m. EST at Mar-a-Lago in Palm Beach, Florida, alongside Secretary of War Pete Hegseth and Secretary of the Navy John Phelan.

*TRUMP'S 4:30PM ANNOUNCEMENT TODAY IS ON SHIPBUILDING: OFFICIAL

— zerohedge (@zerohedge) December 22, 2025

No details have been released about the substance of the announcement, which comes as the holiday week begins with Christmas Eve just days away.

The timing follows a flurry of defense and national security developments. Last week, Trump signed the annual defense policy bill into law, authorizing roughly $900 billion for the Pentagon. Since then, the administration has escalated gunboat diplomacy in the Caribbean, raised new national security concerns over offshore wind farms, and sparked diplomatic backlash after appointing a special envoy, which prompted an angry response from Denmark’s foreign minister earlier today.

It is worth noting that The Epoch Times expects the announcement to focus on shipbuilding, a fitting topic given the Pentagon's strategic repositioning across the Western world and the increased emphasis on hemispheric defense. We have informed readers about how Goldman is profiting from this historic realignment (see here).

Given the news flow, here are several topics Trump, Hegseth, and Phelan could address:

• Trump signs defense policy bill into law

• Hunting Season: US Forces Target Third 'Dark Fleet' Tanker Near Venezuela

• Trump Wants New "Golden Fleet" Of Future Battleships For Hemispheric Defense

• Leases For Five Offshore Wind Projects Suspended Over Radar-Related National Security Concerns

• Denmark Furious After Trump Names Special Envoy To Greenland

Watch Live:

.  .  . 

Tyler Durden Mon, 12/22/2025 - 16:25

"Power That Goes Unpunished Only Learns One Lesson: It Can Do Whatever It Wants..."

Authored by James Howard Kunstler,

Seeing Is Believing (Not)

"...power that goes unpunished only learns one lesson: it can do whatever it wants."

- Roger Stone

Has it occurred to you that the video footage of the hallway outside Jeffrey Epstein’s prison cell that shows nobody coming or going around the hour that he “killed himself” could be fake? All authorities from the FBI to The New York Times pretend that the date-and-time stamped video is authentic, and that it proves nobody went into his cell to kill him. Nobody has questioned this. How difficult would it be to take a few hours of alternate closed-circuit TV footage of the same drab hallway from the same position, making sure nobody got on-camera, and then stick a fabricated date-and-time stamp on it? Do you suppose that the intel agencies don’t have the capacity to fabricate that sort of evidence?

At this point, seeing what the capabilities are for AI to compose any kind of picture — or even what years’ old Photoshop programs can do — why would you suppose that anything in the Epstein files now being released might not be subject to fiddling by persons and parties with an interest? Even one second of video showing a notable person in somebody’s arms, or performing an illicit act with a child, a mere glimpse of such a thing, would be A) easy to manufacture, and B) guaranteed to create a mighty shit-storm of a political crisis that would steal everybody’s attention from now until the Rockies tumble.

The Epstein files looks like the end of the seeing-is-believing phase of human history. Whatever dazzling fakes you’re watching on “X” these days, consider that the deep fake abilities of government agencies are a mile ahead of commercially-available AI tech that any jamoke on TikTok can use. I wouldn’t believe a single goshdarn thing coming out of these files that preoccupy the nation right now — while many momentous events unfold at home and around the world unnoticed, or get crowded out by the hoo-hah over Jeffrey Epstein’s sketchy doings. The further forward in time this goes, the worse you can expect it to get.

And why wouldn’t it be in the intel community’s interest to keep this hoo-hah going as long and hard as possible, so as to distract the public from some of the other problems besetting the republic — such as the intel community’s obdurately sociopathic and seditious activities against that very republic?

Talk might be cheap, too, but there’s plenty of chatter on the Internet these days to the effect that a claque of players with familiar names, currently under suspicion of major misdeeds, are secretly running critical sections of the government as a kind of rogue directorate.

For instance, former CIA Director John Brennan, whose front-job for years has been as a “national security contributor” to MSNBC/NBC.

Do you suppose he sits around his home-office all the livelong day and doesn’t talk to any of his old colleagues? How else would he acquire any “national security” info to report on cable TV? And might you wonder whether these conversations, if they occur, include not just queries and postulations but instructions? That is, orders. . . for people to carry out such-and-such activities? Or suggestions of orders?

And, of course, John Brennan is just one character in a basket of deplorable former intel officials who conceivably wield influence, or issue orders, in the vast turbid, stagnant, septic backwaters of America’s intel swamp.

To name a few: Jim Clapper, Michael Hayden, Mike Pompeo, Avril Haines, Leon Panetta, Gina Haspel. Just add the rest of the list of bigshots who signed the infamous 2020 Hunter Biden / Russian disinfo “open letter.”

And dozens more including a big gang of ex-FBI and DOJ with cases pending for activities that have the shape and smell of a coup to overthrow the US government (that they served.

Do you suppose any of them might have an interest in stirring the pot of cognitive dissonance that is making it nearly impossible for the people of this land to understand what the fuck is going on around them?

You’ve got to wonder what John Ratcliffe thinks about all this (and about the 21,000 employees of the CIA he supposedly directs). And what Tulsi Gabbard knows about the sundry communications flying around the American digital ether.

And what fresh treachery is yet being launched by this coterie of scoundrels. And now imagine how difficult life must be for one President Donald Trump. Just sayin’.

Tyler Durden Mon, 12/22/2025 - 16:15

Maduro Must Go, DHS Secretary Noem Says, Vows More Tanker Intercepts

Washington is making clear - in case there was still lingering confusion in anyone's mind - that we have entered the "Maduro must go" phase of looming regime change operations targeting Venezuela.

A fresh Monday statement from Homeland Security Secretary Kristi Noem makes clear that "We're not just interdicting these ships, but we’re also sending a message around the world that the illegal activity that Maduro is participating in cannot stand, he needs to be gone, and that we will stand up for our people."

Source: @Sec_Noem

"This is an enemy of the United States that we're taking strong action against, and our Coast Guard is doing a rock-star job going out there and interdicting these ships safely, but also sending a strong message that we will stop this flow and we will continue to stand up for our country," Noem said.

The Coast Guard falls directly under Noem’s jurisdiction, and while it has been the Pentagon doing the drug boat strikes with drones, the Coast Guard has been seeking to intercept and take control of a third 'illicit' tanker in waters off Venezuela.

Sources have told Bloomberg that US forces are still in pursuit of the Bella 1 tanker, which was en route to Venezuela to be loaded with oil. Amid conflicting reports that it had been boarded by American troops, US officials later told The New York Times that the Bella 1 refused to be boarded and fled to the northeast, into the Atlantic Ocean.

It remains unclear whether the Bella 1 will ultimately "get away" or not:

U.S. forces approached the Bella 1 late on Saturday. But it refused to be boarded, instead turning and creating what one U.S. official described as “an active pursuit.”

By Sunday, the Bella 1 was still fleeing the Caribbean and was broadcasting distress signals to nearby ships, according to radio messages reviewed by The New York Times and first posted online by a maritime blogger. The vessel was traveling northeast into the Atlantic Ocean, more than 300 miles away from Antigua and Barbuda, the messages showed. By Sunday evening, Bella 1 had sent over 75 alerts.

It is not clear what steps the United States is taking to pursue the ship. The White House said Mr. Trump would make an announcement on Monday afternoon with his defense secretary and his navy secretary but provided no indication of the subject.

These tanker interdict actions have clearly been stepped up, and more will likely follow, raising the stakes also as China and Russia could react with strong condemnations:

The Coast Guard on Saturday stopped and boarded the Centuries, a tanker that had recently loaded Venezuelan oil, reportedly for a Chinese trader. The U.S. authorities did not have a seizure warrant for the Panamanian-flagged vessel and said they were verifying the validity of its registration. It was unclear how long the ship would be detained.

On Dec. 10, the United States had seized another tanker, the Skipper, which was transporting Venezuelan crude but had earlier carried Iranian oil. The Skipper has been escorted to Galveston, Texas.

This month the US strikes on alleged trafficking boats have have killed about 100 people total since early September. While these actions have remained deeply controversial, denounced in many quarters as 'extra-judicial killings' - Congress has essential neutered itself.

NY Times: the tanker the US seized today, called "the Centuries, is not on a list of tankers under U.S. sanctions that is publicly maintained by the Treasury Department. The people inside Venezuela’s oil industry said the cargo belongs to an established China-based oil trader… pic.twitter.com/UXNkKBKgUq

— Steve Lookner (@lookner) December 20, 2025

Recent bills before the House have sought war powers for Congress, which would have required President Trump to seek Congressional approval for further military action; however, these efforts have been voted down, and the strike down was largely bipartisan.

* * *

Enter the "days are numbered" rhetoric on Venezuelan strongman Maduro. There's been speculation he could flee to places like Qatar or even Russia, like someone else did a year ago...

via Enab Baladi Tyler Durden Mon, 12/22/2025 - 15:45

Trump Ditches 'The Weave', Delivers Sales Pitch Susie Wiles Asked For

Authored by Philip Wegmann via The RealClearPolitics,

White House Chief of Staff Susie Wiles directed President Trump to the teleprompter to deliver specific and scripted remarks in prime-time – rather than the off-the-cuff kind he favors on the stump – about affordability, the accomplishments of his first term, and the challenges ahead.

He delivered a rally speech in miniature Wednesday night, minus only his signature “weave.” Said the president of the myriad of problems facing the nation from high prices and lingering inflation to rising rents and unaffordable healthcare, “It’s not the Republicans’ fault – it’s the Democrats’ fault.” That was the throughline of the entire message. And it is one his party was desperate for him to deliver as they anxiously await the midterm elections next year.

While Trump provide little that was new in terms of policy, the president did change his tone. He admitted that problems persist for everyday Americans despite his best efforts.

“Eleven months ago, I inherited a mess,” he said of his predecessor, President Joe Biden, then immediately added “and I am fixing it.” A long list of accomplishments followed. Among them: Wages are up, inflation down, and the border sealed. Like a chairman of a corporate board delivering an end-of-year report, he ran through a list of promises made on the campaign and promises kept once returned to the White House.

“We’re doing what nobody thought was even possible, not even remotely possible. There has never, frankly, been anything like it,” he said, repeating a popular line from his rallies. “One year ago, our country was dead. We were absolutely dead. Our country was ready to fail – totally failed. Now we’re the hottest country anywhere in the world.”

The president relishes the role of a cheerleader. It has led to blind spots, however, as his long-promised “Golden Age” has yet to trickle down to lower and middleclass tables. Yes, he succeeded in getting many of his marquee domestic policy priorities, encapsulated in the One Big Beautiful Bill, into law. No, the public is still not feeling it despite his insistence on an American renaissance. So say the polls.

Trump remains underwater with more Americans now disapproving, 53.8%, than approving, 43.6%, of his job performance. More worrisome for the White House, according to the RealClearPolitics Average, a majority of the country, 62.8%, disapprove of how Trump has handled inflation even as inflation has mostly stabilized one year into his second stint as president.

Inflation dropped to just 2.8% over the past year compared to its peak under Biden at 9%. Wages have increased as well, and some prices, like the cost of a gallon of gas or a dozen eggs, have come down. Despite those changes, Trump found himself in a position similar to that of Biden when he insisted that the economy remained healthy even as the public did not feel the improvement.

And like the president before him, Trump asked for patience in so many words. The best, he said, was yet to come: “We are poised for an economic boom, the likes of which the world has never seen.”

One thing Trump did not say? He did not argue that affordability amounted to “a Democratic hoax.” Earlier this month in Pennsylvania, he repeated that line before adding a canned explanation about how believing Democrats on questions of the economy was akin to “trusting Bonnie and Clyde with public safety.” The cheerleader in chief instead recognized on Wednesday night that Americans are feeling pain and promised speedy relief, especially come tax season.

Christmas will come in April, the president argued as he touted no tax on tips, no taxes on overtime, and no tax on Social Security benefits. “Under these cuts, many families will be saving between $11,000 and $20,000 a year,” he said, “and next spring is projected to be the largest tax refund season of all time.”

Democrats did not make much of Trump’s deflections.

“People are tired of him trying to throw President Joe Biden under the bus,” said House Minority Leader Hakeem Jeffries. During an interview on MS NOW (formerly MSNBC), the Democrat argued that Trump owned the anxieties of the current economy. “What’s been clear in public opinion, survey after public opinion survey, the American people know this is Donald Trump’s economy. This is the Republicans’ economy. And it’s been a complete and total disaster.”

Republicans are hoping that voters make up their minds as they file their tax returns, perhaps none more so than Speaker Mike Johnson who believes that tax cuts will “turbocharge the economy” and help him keep his House majority in the process. That’s not likely, however. Only two presidents in the last century, Franklin Delano Roosevelt and George W. Bush, have added to their congressional majority during midterm elections.

A foreign war could make that already difficult task much harder. Before the speech began, Secretary of State Marco Rubio was spotted by reporters pacing outside of the Oval Office. His presence fueled speculation that perhaps Trump would announce a further military escalation in the conflict with Venezuela. The administration continues to sink alleged drug boats coming from that country, and this week the president announced a blockade of Venezuelan oil tankers. But there was no new announcement. Caracas was absent from Trump’s remarks, other than a passing reference to ongoing actions against the cartels.

Families of U.S. service members likely gave a sigh of relief at that fact. Members of the military, meanwhile, cheered at the one bit of news that Trump delivered.

“Military service members will receive a special, what we call a ‘warrior dividend’ before Christmas – a warrior dividend,” he said. “In honor of our nation’s founding in 1776 we are sending every soldier $1,776.”

A one-time check is not likely to reverse ongoing fear about the economy. Trump’s populist project hangs in the balance if the national mood does not improve and Republicans do not defy history. Speaker Johnson has been blunt on this front. “If we don’t win the midterm,” the speaker said of Trump in an interview with RealClearPolitics last month, “he won’t have four years of a presidency. It will end at two.”

A number of House Republicans have already announced their retirement, among them Georgia Rep. Marjorie Taylor Greene – once a stalwart Trump ally. She delivered the White House a stark warning in the form of a stinging rebuke last month during an interview with CBS News.

Tyler Durden Mon, 12/22/2025 - 15:25

Iran Holds Surprise Missile Drills Near Cities Amid Fears Of New Israel War

Iran on Monday is conducting live missiles drills across several areas and cities, with officials telling the world the military will remain steadfast in defending the country and that its missile program is strictly defensive.

The semi-official Fars news agency confirmed that missile tests were observed in multiple locations, among them Tehran, Isfahan, Mashhad, Khorramabad and Mahabad. Videos were also widely circulated of missiles soaring through the air, visible from urban centers.

Illustrative missile test file image.

"Iran’s defensive capabilities are by no means an issue that can be discussed," Foreign Ministry spokesman Esmaeil Baghaei stated Monday, at a moment of high tensions with Israel, which has denounced the Islamic Republic's ballistic missile program.

The timing is interesting given Prime Minister Benjamin Netanyahu and US President Donald Trump days ago confirmedd they are scheduled to meet December 29 at the Mar-a-lago estate in Florida.

Netanyahu is expected to press his US counterpart on greenlighting possible new strikes on Iranian ballistic missile sites, which Israel says constitutes a threat to the whole region. The US would unlikely directly back such a plan especially at moment its eye is focused on Venezuela.

All of this has sparked concerns that Israel could see the new Iranian test launches as a direct threat, given hundreds of Iranian missiles and drones rained down on Israeli cities and bases during the June 12-day war.

Axios, for example, reports that "Israeli officials warned the Trump administration over the weekend that an Iranian Revolutionary Guard Corps missile exercise could be preparations for a strike on Israel, according to three Israeli and U.S. sources with knowledge of the issue."

NEW: Missile-related activity reported across Iran, including loud sounds near Khorramabad and missile trails over Mashhad and other cities.

IRGC is likely holding a missile exercise. pic.twitter.com/vG7Y5O4jKA

— Clash Report (@clashreport) December 22, 2025

An Israeli official was cited as saying, "The chances for an Iranian attack are less than 50%, but nobody is willing to take the risk and just say it is only an exercise."

And yet this is precisely what Tehran has now projecting - that it's actions are 'defensive' in nature and that it does not act in the way of an aggressor. 

A further alarming statement from the Axios report is in the following: "The sources said the biggest risk is a war between Israel and Iran will break as a result of a miscalculation with each side thinking the other plans to attack and try to preempt it."

The June war itself began as a surprise attack by Israel, which the US supported with its own follow-up bombings of three nuclear sites. Tehran was on the very eve of the conflict engaged in good faith negotiations with Washington, and has since complained of the betrayal and obliteration of any shred of trust.

Between the lines: The sources said the biggest risk is a war between Israel and Iran will break as a result of a miscalculation with each side thinking the other plans to attack and try to preempt it https://t.co/y7NdE224nG

— Barak Ravid (@BarakRavid) December 22, 2025

President Trump then touted that he oversaw a ceasefire, and likely US officials behind the scenes pressured Israeli to admit the complete 'obliteration' of Iran's nuclear program, though this remains anything but certain or verified.

Tyler Durden Mon, 12/22/2025 - 15:05

23 US States Are At High Risk Of (Or In) Recession Currently

U.S. GDP is made up of many smaller, distinct state economies fueling national growth.

In 2025, states responsible for about a third of U.S. GDP are in recession, or face high recession risk.

Another third are expanding, including Florida and Utah, based on payrolls, employment, and other key economic data.

This graphic, via Visual Capitalist's Dorothy Neufeld, shows recession risk by state in 2025, based on analysis from Mark Zandi, chief economist at Moody’s Analytics.

Where Recession Risk is Highest in America

To analyze recession risk, Zandi looks at state-level economic activity. This included a range of data such as unemployment, building permits, retail sales, industrial activity, delinquency rates, and tax revenues.

States were then categorized into three buckets based on these factors as of October 2025:

• In Recession/High Risk

• Treading Water

• Expanding

State/District Business Cycle Status Share of U.S. GDP (%) Georgia In Recession/High Risk 3.03 Montana In Recession/High Risk 0.25 Wyoming In Recession/High Risk 0.18 Michigan In Recession/High Risk 2.44 Massachusetts In Recession/High Risk 2.73 Mississippi In Recession/High Risk 0.53 Minnesota In Recession/High Risk 1.70 Kansas In Recession/High Risk 0.80 Rhode Island In Recession/High Risk 0.28 Delaware In Recession/High Risk 0.34 Washington In Recession/High Risk 3.02 Illinois In Recession/High Risk 3.85 West Virginia In Recession/High Risk 0.36 New Hampshire In Recession/High Risk 0.42 Maryland In Recession/High Risk 1.86 Virginia In Recession/High Risk 2.66 South Dakota In Recession/High Risk 0.25 Connecticut In Recession/High Risk 1.27 Oregon In Recession/High Risk 1.14 Iowa In Recession/High Risk 0.86 New Jersey In Recession/High Risk 2.93 Maine In Recession/High Risk 0.33 District of Columbia In Recession/High Risk 0.64 Missouri Treading Water 1.54 Ohio Treading Water 3.14 Hawaii Treading Water 0.39 Arkansas Treading Water 0.65 New Mexico Treading Water 0.49 Tennessee Treading Water 1.87 New York Treading Water 7.92 Vermont Treading Water 0.16 Alaska Treading Water 0.24 Colorado Treading Water 1.92 California Treading Water 14.50 Nevada Treading Water 0.86 South Carolina Expanding 1.18 Texas Expanding 9.41 Oklahoma Expanding 0.92 Idaho Expanding 0.43 Kentucky Expanding 0.99 Alabama Expanding 1.10 Indiana Expanding 1.81 Nebraska Expanding 0.63 North Carolina Expanding 2.86 Louisiana Expanding 1.11 Florida Expanding 5.78 North Dakota Expanding 0.26 Pennsylvania Expanding 3.54 Arizona Expanding 1.88 Wisconsin Expanding 1.53 Utah Expanding 1.02

Currently, many coastal, Northeastern states are facing some of the worst economic conditions.

In Maine, for instance, year-over-year GDP growth is just 0.8% as of Q2 2025, compared to the U.S. average of 2.1%. Meanwhile, Washington, D.C.’s unemployment rate was 6.4% in July, significantly higher than the 4.6% U.S. average given sweeping federal cuts.

According to Zandi’s analysis, New York and California are “Treading Water”, together responsible for driving over 22% of U.S. GDP.

In comparison, Texas, which fuels 9.4% of U.S. economic growth is expanding. Unemployment rates of 4.0% in July remain below the U.S. average. Additionally, the Texas economy is growing faster than the nation, while income growth rose 6.3% annually as of Q2 2025, outpacing the national average.

To learn more about this topic, check out this graphic on unemployment by state in 2025.

Tyler Durden Mon, 12/22/2025 - 14:25

Insane Financial Imbalances And Social Revolution

Authored by Charles Hugh Smith via OfTwoMinds blog,

A rebalancing of the economy and society will ultimately prove very positive, but first we must navigate the model collapse of insane financial extremes.

I've endeavored to explain how self-referential models veer into hallucinations that are accepted as accurate reflections of the real world. Models are by definition synthetic abstractions of the real world, and as these "train" on their own output, they drift away from authentic understanding without the users being aware that their "world" is both artificial and self-reinforcing: each iteration reinforces their belief in the model's accuracy.

Patient users of AI programs can force AI to admit its output was a hallucination, at which point AI tends to abjectly apologize. But human pride--especially strong among those with high opinions of their intelligence and mastery of life--precludes recognition of catastrophic error (i.e. believing in a hallucination) and apologizing for the error.

Human hubris leads us to double-down when faced with evidence we've placed our faith in a hallucination. We deny that our system/model is a self-reinforcing hallucination even as we go over the falls. The faint cries of "save me!" are short-lived.

Models collapse from their own internal dynamics. They don't need our approval. Our disapproval doesn't stop their collapse. Our choices boil down to 1) go over the falls as models collapse; 2) snap out of the hallucination or 3) enter the netherworld of hyper-normalization, the state of mind where we embrace two contradictory "truths": the hallucination is forever and we're not surprised when it collapses.

Model collapse manifests in many ways: people and systems break down. Anti-social behaviors become normalized, and extremes are accepted as normal as we habituate to dysfunction and breakdowns.

I call this Anti-Progress: what we're sold as "progress" actually reduces our quality of life. In my book The Mythology of Progress, I describe Progress as a powerful mythology, but it can also be understood as a model that is collapsing into a hallucination we cling to with hubristic tenacity.

In everyday life, these extremes manifest as Ultra-Processed Life, a synthetic world in which artificial substitutes have replaced authentic life and experiences because the model increases profits via unhealthy addictions in both the consumer and digital realms.

But people break down in this Mouse Utopia of ultra-processed abundance, and the model's self-reinforcing iterations veer ever farther from authentic experiences.

Which brings us to my latest podcast with Richard Bonugli, Insane Financial Imbalances and a Social Revolution (36:34 min). The word "insane" is jarring, for the dominant model of the global order holds that financial extremes are not just sane, they're proof that all is well, and so calling these extremes "insane" is what's insane.

This is classic model collapse: up until the point of breakdown, the model seems to be functioning perfectly, because being self-referential, there is no other possible output other than the system is performing nominally.

In my new book Investing In Revolution, I describe the two structural flaws in the current model: 1) due to its success in generating abundance, the model's adaptive capacity has decayed, leaving it incapable of adapting to rapidly changing real-world conditions, and 2) the dominance of the financial model has fatally imbalanced society and the economy, an extreme imbalance that will be rebalanced by the pendulum swinging to the opposite extreme.

I call this systemically predictable rebalancing a social revolution, as meet the new boss, same as the old boss is no longer sufficient: the values and incentives that maintain a sustainable balance between society and the economy must change. This Reformation is not financial or political, it is fundamentally social in nature.

This imbalance is visible in the widening divide between the share of the economy going to labor and capital: wage earners' share has been declining for decades, reducing their capacity to afford a secure quality of life without piling up debt:

The earnings generated by ownership of capital go mostly to the very top of the wealth-power pyramid: the majority of income from capital flows to the top 0.25%, with the rest dribbling down to the top 5%.

The bottom 50%'s share of financial assets amounts to signal noise--2.6%.

This imbalance is so extreme that it will catalyze social disorder, yet to call it unsustainable is "insane."

The health of the non-elites has reached crisis levels, yet this too is unremarkable because the model has a "solution": more costly medications that must be taken for life: highly profitable, so all is well.

The hallucination that this is all wonderfully sustainable reveals the dominance of the financial model of how the world works. That society is breaking down is of no concern because natural gas is so abundant that we can easily power up AI data centers, and GDP is rising.

The problem is we only manage what we measure, and all the financial analysis "trains" on its own output. Those staring at screens of soaring stocks and corporate profits declare this is the best possible world while the social order breaks down around them.

A rebalancing of the economy and society will ultimately prove very positive, but first we must navigate the model collapse of insane financial extremes, extremes that are unrecognized in the current hallucination. The collision of the self-reinforcing hallucination with the real world will be challenging.

If we accept that the dominant models have lost their capacity to adapt, and that the imbalance between economic forces and society have reached extremes that demand rebalancing, we can return to the real world in good order. If we cling to the hallucination, then over the falls we will go.

*  *  *

My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free) Check out my updated Books and Films. Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free

Tyler Durden Mon, 12/22/2025 - 14:05

Dave Chappelle Says Charlie Kirk "Was No MLK" In New Netflix Special

Sometimes comedians fall flat, especially when they write jokes about a recently murdered person without understanding the fundamental facts of their life.  Is it possible to make comedy about a recent assassination and be legitimately funny?  Probably.  However, Chappelle missed a golden opportunity to expose some truth and instead tried to play it safe and ride the political fence. 

In Chappelle's latest Netflix comedy special entitled "The Unstoppable", the comedian touched on the issue of Kirk's murder but never provided any profound insights.  He did try to put himself in Kirk's shoes, admitting his fears that he could end up in the same position due to his criticisms of trans ideology.

"This is another reason it’s hard to talk in America, ’cause, you know, if you talk for a living and see Charlie Kirk get murdered that way, I’m gonna be honest, ni*ga, I was shook. I mean, Charlie Kirk is the wholesome white guy, and they killed this motherfucker."  

"...When all the information was still shoddy, they came out, they were like, ‘Apparently, there were transgender messages inscribed on the bullets.’ I was like, ‘Oh no! I’m dead as fried chicken!’"

The brass cases were actually inscribed with Antifa slogans and a "furry" meme, though the prime suspect, Tyler Robinson, is a far-left gay man who was living with his transgender boyfriend at the time.  According to the charging record, Robinson's conservative parents confronted him about the killing and said that he confessed to committing the crime.  They convinced him to surrender to police after he indicated he might commit suicide.    

It's unfortunate that Chappelle so carefully avoided the elephant in the room by ignoring this fact, as well as the widespread celebration among leftists over Kirk's death.

In the wake of the event there was a relentless progressive propaganda campaign designed to misinform the American public that Tyler Robinson is a "MAGA conservative" instead of a gay leftist.  This culminated in a propaganda screed by another "comedian", Jimmy Kimmel, who used his network platform to spread the same falsehoods.  Chappelle defended Kimmel instead of acknowledging why his show was punished by the network. 

Like Kirk, Chappelle also faced an attack when a gay man carrying a knife rushed him on stage because of a routine about transgender people.  The comedian says he is now fearful of going on stage and being killed.

"My voice has become more powerful than I intended it to be, and I cannot let these n*ggas do me like Charlie Kirk. Or even worse than that, what if these n*ggas trip me up somehow, co-opt me, and then make me say the things that they want me to say? We can't have that."

Chappelle also claimed that "white people" compared Charlie Kirk to Martin Luther King, and then he mocked the notion. 

Dave Chappelle trashes Charlie Kirk in his new standup special, acting like Charlie was purely an online influencer instead of someone who toured and shared his message in person and amplified those IRL interactions via social media pic.twitter.com/h1fA6v6yWb

— Breitbart News (@BreitbartNews) December 20, 2025

Critics argue that comparing Kirk to MLK was never an actual point of contention among conservatives (or white people in general) and that Chappelle has constructed a strawman to pander to liberals and "centrists." 

Chappelle calls Kirk an "internet personality" and seems completely oblivious to his numerous campus talks and the size and scope of the Turning Point USA movement.  If there are any similarities (beyond assassination) between MLK and Kirk, it is that they both engaged with the public and students regularly on college campuses to defend their ideals. 

And, if we're talking about religious devotion or Christian virtue, at least Kirk was faithful to his wife.  MLK was a notorious adulterer.

It should be mentioned that Charlie Kirk defended Dave Chappelle's comedy routines on the transgender issue when Chappelle was facing career cancellation by the political left.  He also condemned the lack of charges against the man who attacked Chappelle onstage, warning that it would encourage further political violence. 

Dave Chappelle exposes the truth about trans as only he can. This is brilliant. WATCH: pic.twitter.com/bV71LaM6E1

— Charlie Kirk (@charliekirk11) January 1, 2024

The very idea that comedians today have a fear of violent reprisal for political jokes shows that, unfortunately, assassinations can be very effective in squelching free speech simply by compelling people to self censor.  Leftists know this well, it's the reason they cheered for Kirk's death and called for more killings. 

Chappelle, like most celebrities, may be greatly overestimating his political influence.  If Charlie Kirk is no MLK, then Dave Chappelle is definitely no Charlie Kirk.  That said, the weak response by public figures like Chappelle against the political left's violence only emboldens them.   

Tyler Durden Mon, 12/22/2025 - 13:45

Yields Hit Session Highs After Poor, Tailing 2Y Auction Sees Lowest Foreign Demand Since 2023

It's the last treasury auction week of the year, and due to upcoming holidays, we are running on an accelerated scheduled which means the 2Y auction which usually takes placed on Tuesday, is Monday's business instead. It was a subpar auction with modest demand; overall grade - not great, not terrible.

The auction of $69BN in 2Y paper stopped at a high yield of 3.499%, up 1bp from last month's 3.489%, and tailed the When Issued by 0.3bps, the biggest tail for the short-end since April's 0.6bps tail. It followed a series of what had been mostly stopping through auctions throughout 2025. 

The bid to cover was 2.543, down from 2.684 in November and the lowest since September; it was also below the 6-auction average of 2.623.

The internals were also mediocre at best, with Indirects awarded just 53.21, down from 58.07 and the lowest since March 2023. And with Directs taking down 34.05%, higher than November's 30.74% and above the recent average of 31.69%, Dealers were left holding 12.74% of the sale, the most since June.

Overall, this was a soft, subpar auction, with weak demand metrics, confirmed by the jump in 10y yields to session highs after the break. 

Tyler Durden Mon, 12/22/2025 - 13:32

A Christmas Carol For The Markets, 2025 Edition

By Elwin de Groot, Head of Macro Strategy at Rabobank

As the year draws to a close, Ebenezer “Macro” Scrooge looks back on an eventful 2025. Sitting alone in his glass-walled office on Christmas Eve, the city below twinkling like a Bloomberg terminal in night mode. His screens glowed with charts: yield curves steepening, equities hitting all-time highs, and a lonely alert blinking – “Critical raw materials shortage: nutmeg unavailable.”

“Bah, tariffs!” he grumbled, stabbing at his keyboard. “Christmas is inefficient. If only people understood the beauty of a well-balanced trade account.”

The year had been brutal on his nerves: Trump’s tariff threats in January, the April Global Tariff Shock. And even if the US Supreme Court decides to annul those tariffs, refunding the collected import tariffs would create a “major problem”, Kevin Hassett, US economic policy advisor and shortlisted for replacing Powell, noted over the weekend.

And the list goes on… China’s rare earth export controls in October, and wars that rattled energy markets. Even Scrooge’s Christmas tree had become a macroeconomic case study – 15% pricier thanks to US import tariffs. And the cake for this week’s party? Delayed because nutmeg and cinnamon were now a geopolitical pawn. The EU and China aren’t of much help either. EU-China relations have changed dramatically this year: yesterday China levied tariffs of up to 42.7% on some dairy products from the bloc.  And thinking about getting stuff from the North to the South pole? Well, shipping isn’t what it used to be!

As the clock struck midnight, a chill swept through the room. Suddenly, a shimmering figure appeared – the Ghost of Christmas Past, dressed in a suit stitched from old bond certificates.

“Ebenezer,” the ghost intoned, “look back at 2025.”

The office dissolved into January’s chaos: Trump inaugurated, markets jittering at threats of 25% tariffs on autos and semiconductors. February brought German elections and a €500bn debt-fuelled spending spree. April’s tariff shock loomed large, sending reciprocal tariffs ricocheting across continents. In the UK, Reform UK may, someday, Reform the Bank. And France still has got no 2026 budget! Scrooge watched traders panic, algorithms whirring like snowblowers in a storm.

“Remember the fear?” the ghost asked. “Yet markets proved resilient. AI investments and consumer spending kept growth alive. Oil prices have kept falling; the US blockade of Venezuelan oil has only dented that move. And even Europe, with its post-NATO summit defence roadmap and green-tech push, surprised you.”

Scrooge snorted. “Resilient? My stress index hit a record high.”

Before he could argue, the Ghost of Christmas Present appeared – a lively spirit juggling ornaments labelled “Geopolitics,” “AI,” and “Interest Rates”;  It whisked him to a bustling Christmas market. Families laughed despite the higher prices of gifts and trees.

“See?” said the ghost. “People adapt. They value togetherness over tariffs. Even after war in the Middle East, after shutdowns and rare earth scares, they choose negotiations and peace at their tables. And let’s hope that is also a prospect for the Sudanese and Ukrainian people.”

Scrooge noticed a baker struggling with a half-finished cake. “Critical raw materials,” the ghost chuckled. “China’s export controls made nutmeg a luxury. But look – some kind of monetary policy will still be made and neighbours share what they have. The cake will be baked.”

“Sharing?” Scrooge frowned. “Sounds like fiscal transfers.”

The ghost winked. “Call it social capital. Higher ROI than any hedge fund.”

Finally, the Ghost of Christmas Yet to Come appeared, shrouded in clouds of uncertainty like a long-term yield curve. It showed Scrooge a future where his firm ignored human values, chasing only returns. The office was empty, silent – no laughter, no warmth.

“This,” the ghost whispered, “is the cost of forgetting what matters.”

Scrooge trembled. “No! Tell me the future can change!”

He awoke on Christmas morning, heart pounding like a trader’s after a Fed rate cut announcement. Throwing open the window, he saw delivery drones buzzing in with gifts – late, but arriving. The baker waved: the cake was done, thanks to a last-minute spice swap. Scrooge smiled for the first time in years. He cancelled his meeting on tariff hedging and joined his family, raising a toast:

“To resilience – in markets and in life! May our yield curves steepen with joy, not stress.”

And so, despite a year of shocks – tariffs, wars, shutdowns, and shortages – Christmas triumphed. Not through perfect policy or flawless forecasts, but through the enduring power of connection. Even Ebenezer Macro Scrooge learned that while currencies weaken and spreads tighten, the true value lies in being present.

….

Dear reader, this was just a small selection of some of the most eye-catching developments we wrote about in 2025. With this last Global Daily, we thank you for your attention and all the feedback we have received. Our service resumes on 5 January. We look forward to do it all over again in 2026!

Happy Holidays!

Tyler Durden Mon, 12/22/2025 - 13:25

Democratic Despotism: The American Left Moves From Censored To Compelled Speech

Authored by Jonathan Turley,

More than five years ago, I wrote in these pages of a growing trend on the left toward compelled speech - the forcing of citizens to repeat approved views and values. It is an all-too-familiar pattern. Once a faction assumes power, it will often first seek to censor opposing views and then compel the endorsement of approved views.

This week, some of those efforts faced setbacks and challenges in blue states like Washington and Illinois.

In Washington state, many have developed what seems a certain appetite for compelled speech. 

For example, Democrats recently pushed through legislation that would have compelled priests and other clerics to rat out congregants who confessed to certain criminal acts.

Despite objections from many of us that the law was flagrantly unconstitutional, the Democratic-controlled legislature and Democratic governor pushed it through.

The Catholic Church responded to the enactment by telling priests that any compliance would lead to their excommunication.

U.S. District Court Judge Iain D. Johnston enjoined the law, and the Trump Administration sued the state over its effort to turn priests into sacramental snitches. Only after losing in court did the state drop its efforts.

In the meantime, the University of Washington has been fighting to punish professors who refuse to conform to its own orthodox values. In 2022, Professor Stuart Reges triggered a firestorm when he refused to attach a prewritten “Indigenous land acknowledgement” statement to his course syllabi. Such statements are often accompanied by inclusive and tolerant language of fostering different viewpoints in an academic community. However, when Reges decided to write his own land acknowledgment, university administrators dropped any pretense of tolerance.

Reges was not willing to copy and paste onto his syllabus a statement in favor of the indigenous land claim of “the Coast Salish peoples of this land, the land which touches the shared waters of all tribes and bands within the Suquamish, Tulalip, and Muckleshoot nations.” Instead, he wrote, “I acknowledge that by the labor theory of property, the Coast Salish people can claim historical ownership of almost none of the land currently occupied by the University of Washington.”

His reference to the labor theory is a nod to John Locke, who believed in natural rights, including the right to property created through one’s labor.

In my forthcoming book, “Rage and the Republic: The Unfinished Story of the American Revolution,” I explore the foundations of the American Republic, including the influence of Locke. The Framers would have been appalled by efforts to compel speech as an example of “democratic despotism.”  The Framers saw the greatest danger to our system as coming not from a tyrant but the tyranny of the majority.

Reges came face-to-face with the rage of a majority faction defied. He was told that although the university land acknowledgment was optional, his own acknowledgment was not allowed because it contributed to “a toxic environment.”

This week, the U.S. Court of Appeals for the Ninth Circuit ruled in Reges’s favor and allowed his lawsuit to move forward.

Judge Daniel Bress wrote that “student discomfort with a professor’s views can prompt discussion and disapproval. But this discomfort is not grounds for the university retaliating against the professor.”

Reges’s lawsuit, brought with the help of the Foundation for Individual Rights and Expression, is a major victory for free speech.

However, the desire to both silence and compel speech continues to grow in tandem.

In Illinois, Democrats have taken up the cudgel of compelled speech on the issue of abortion. Again, over objection that the law was unconstitutional, Democrats and Gov. JB Pritzker passed a law that said that all healthcare providers, including pro-life and religious pregnancy help centers, must extoll to their patients the “benefits” of abortion, even if they have faith-based objections to abortion.

The Catholic Conference of Illinois and other religious organizations are represented by the Becket Fund, a leading defender of religious liberty in the courts.

A district court recently struck down the law, but Illinois refuses to give up. It is appealing the case in the hope of forcing pro-life health professionals to espouse the benefits of abortions.

Cardinal Blase Cupich, Chicago’s archbishop, warned this week that “The Church’s pro-life mission is under attack in Illinois” and called on every Catholic to oppose “this inhumane mandate.”

Note that neither the constitutional guarantee of free speech nor that of free exercise deterred these efforts to compel speech.

It is the very face of democratic despotism as the majority brushes aside disfavored views and values as “toxic” or “harmful.”

It shows how, 250 years after our founding, the seeds for majoritarian tyranny remain in this (like in any) democratic system.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of the forthcoming “Rage and the Republic: The Unfinished Story of the American Revolution” on the 250th anniversary of the American Revolution.

Tyler Durden Mon, 12/22/2025 - 12:05

The post The Rich Control the Media: Whining Is Not a Strategy appeared first on CEPR.

Trump Admin Tests New Medicare Drug Pricing Pilot Programs

Authored by Jacki Thrapp via The Epoch Times (emphasis ours),

The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) announced two pilot programs on Dec. 19, as the Trump administration tests new ways to lower out-of-pocket drug costs for Americans on Medicare.

An employee is seen at a Florida pharmacy in this file photo. Joe Raedle/Getty Images

The first pilot program, Guarding U.S. Medicare Against Rising Drug Costs (GUARD), would apply an alternative approach to calculating prescription drugs for people on Medicare.

GUARD will examine drug prices in other countries, and if the United States discovers a drugmaker is charging more for the item in America, it may have to pay the government back.

The United States will reference prices in Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.

“Existing research finds that the prices of drugs sold in the United States are much higher than the prices of the same drugs sold in other countries,” the pilot program stated.

“One study finds that overall, the U.S. health care system spends substantially more on outpatient drugs for older adults with complex conditions, such as heart failure, diabetes, and chronic obstructive pulmonary disease (COPD), who are mostly covered by Medicare, than 11 other economically similar countries (including, for example, Australia, France, Germany, Canada, and the United Kingdom).”

The GUARD model would include drugs like antidepressants, antivirals, blood glucose regulators, cardiovascular agents, and gastrointestinal agents.

Spending on Medicare Part D drugs doubled in less than a decade, ballooning from $121 billion in 2014 to $276 billion in 2023, according to the Medicare Payment Advisory Commission (MedPAC).

The GUARD model would begin on Jan. 1, 2027, and end on Dec. 31, 2033. The “payment period” would be extended through December 2035.

The second test program, called Global Benchmark for Efficient Drug Pricing (GLOBE), will examine global price data to set patients’ out-of-pocket costs for certain drugs included in Medicare Part B, which would impact costs for treatments related to cancer, autoimmune diseases, eye disorders, and hormonal conditions.

GLOBE will launch on Oct. 1, 2026, and run through 2031.

The Dec. 19 announcement came as the Trump administration also said nine drugmakers had agreed to lower prescription drug costs in America.

“This represents the greatest victory for patient affordability in the history of American health care, by far, and every single American will benefit,” Trump said alongside health care executives at a ceremony inside the Roosevelt Room on Dec. 19.

“So, this is the biggest thing ever to happen on drug pricing and on health care. This will have a tremendous impact on health care itself.”

Reuters contributed to this report.

Tyler Durden Mon, 12/22/2025 - 11:25

Russian General Killed By Car Bomb In Moscow, Marks 3rd Top Officer Assassinated In A Year

A Russian general was killed early Monday after a bomb detonated beneath his car in southern Moscow, Russian law enforcement officials have announced. The hugely provocative act, which was likely either carried out by Ukrainian operatives or allied Western intelligence (or both) marks the third killing of a high-ranking defense official over the past year.

The slain senior officer has been identified Lieutenant General Fanil Sarvarov, 56, who headed the General Staff's operational training department. He initially survived the blast but soon after succumbed to his injuries.

Investigators released video showing a severely damaged white Kia Sorento in a residential parking area near apartment blocks in Moscow's Orekhovo-Borisovo Yuzhnoye district. The doors were shown to be blown out and debris was strewn everywhere.

Kremlin spokesman Dmitry Peskov later indicated that President Vladimir Putin was informed of Sarvarov's death immediately.

BBC describes that Sarvarov "previously took part in combat operations during the Ossetian-Ingush conflict and the Chechen wars in the 1990s and early 2000s, and also led operations in Syria between 2015-2016."

As for the investigation at the scene, The Moscow Times cites officials who say they are "assessing whether Ukrainian intelligence services could be linked to the incident. Ukraine, which has previously acknowledged carrying out similar attacks inside Russia, did not immediately comment."

This adds to a growing list of high profile assassinations related to the Ukraine war. To review:

—Darya Dugina was killed in a car bombing in 2022 which was likely meant for her father, prominent political thinker and often dubbed "Putin ally" Aleksandr Dugin.

—Gen Igor Kirillov died in December 2024 outside of his residence when a bomb planted in a nearby scooter detonated.

—Gen Yaroslav Moskalik, who served as deputy head of the Main Operations Directorate of the General Staff of the Russian Armed Forces, was killed in a car bomb attack last April. A "homemade" explosive device detonated under his Volkswagen Golf in a residential neighborhood.

Throughout the course of the war there's been a string of these high profile assassinations on Russian soil involving car and even cafe bombs.

Footage from the scene of Monday's car bomb attack, which marks the third such covert hit of a top Russian officer in a year:

Russia's Investigative Committee says a car bomb in Moscow has killed a Russian general https://t.co/kajpAQoa2L pic.twitter.com/XmWXf1H8qq

— Reuters (@Reuters) December 22, 2025

The cafe bombing had happened in April 2023, and killed prominent pro-Kremlin blogger and war correspondent Vladlen Tatarsky. The blast at a St. Petersburg cafe during a close-quarters speaking event wounded some two dozen bystanders, six of them critically.

America's CIA or Britain's MI6 has long been suspected of being involved in these targeted killings, or at least assisting in such brazen Ukrainian-linked operations, but ultimately little has been uncovered or proven in terms of a potential Western hidden hand in this ongoing 'dirty war'.

Tyler Durden Mon, 12/22/2025 - 11:05

Today, in the CalculatedRisk Real Estate Newsletter: Question #10 for 2026: Will inventory increase further in 2026?

Excerpt:

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I’ll post thoughts on those in this newsletter (others like GDP and employment will be on my blog).

I'm adding some thoughts, and maybe some predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2022. Since then, inventory has increased but is still below pre-pandemic levels. Will inventory increase further in 2026?

First, a brief history. Here are a few times when watching existing home inventory helped my analysis.

Starting in January 2005, I was very bearish on housing, but I wasn’t sure when the market would turn. Speculative bubbles can go on and on. However, the increase in existing home inventory in late 2005 (see red arrow on graph below) helped me call the top for house prices in 2006.

There is much more in the article.

The US Economy Is Stronger After One Year Of The Trump Administration

Authored by Daniel Lacalle,

One year into Donald Trump’s new presidency, the verdict from the data is clear: the apocalyptic consensus forecasts have failed, and the United States stands as the only major developed economy combining strong growth, controlled inflation and fiscal consolidation.

The same analysts and institutions that applauded massive stimulus, monetary excess and regulatory excess under the previous The same analysts and institutions that applauded massive stimulus, monetary excess, and regulatory excess under the previous administration now struggle to explain why the U.S. economy, which they expected to sink into stagflation, is instead outperforming all of its G7 peers. Furthermore, the U.S. peers that followed net-zero, big government and big tax policies are in secular stagnation.

From the “tariff tantrum” to a global surprise

When Trump announced his new wave of tariffs and trade policy, much of the global consensus rushed to predict a disaster. I called it the tariff tantrum. Commentators warned of an inflation surge beyond 2021 levels, 6%–7% Treasury yields, collapsing investment, a recession, and a world turning its back on the United States in favour of supposedly more responsible governments in Europe.​

Twelve months later, none of those predictions materialised. Instead, the U.S. 10-year yield has fallen to 4.1%; the U.S. is the only G7 economy growing robustly, while those nations that doubled down on hyperregulation, aggressive climate‑driven restrictions, high taxes and ever‑bigger government spending are stuck in stagnation despite enjoying a very positive tailwind of low oil and gas prices.

The “tariff tantrum” never became the structural shock that critics announced, because tariffs—however debatable on other grounds—do not cause inflation because they do not add currency units to the economy; uncontrolled public spending and monetary excess do. ​

Growth, investment and a rare fiscal adjustment.

The performance of the U.S. economy in 2025 is extraordinary not just in relative terms, but on its own merits. Real GDP is growing by around 3.8%, with the Atlanta Fed tracking roughly 3.5% annualised in the third quarter, and private investment is expanding at close to double-digit rates. Crucially, this improvement is happening while federal spending is being cut, not expanded as in other peers: public expenditure has fallen by about 3% over the year instead of disguising poor growth with unproductive federal outlays. ​

All international institutions have had to adjust quickly. The IMF, which initially projected a much weaker performance, now expects U.S. growth of about 2.1% in 2026, and several major research houses have revised their forecasts for 2025 up to around 2.5%, after initially warning of zero or even negative growth. Some economists have publicly acknowledged that the profession misread both the resilience of the U.S. private sector and the real impact of the tariff shock, admitting that from January onwards the consensus The consensus was consistently incorrect about the direction of the economy. ​

The most important factor is that the American expansion is not due to another wave of debt-fuelled political spending but rather to the recovery of the private sector, investment, trade, and productivity. In a world where most developed nations’ governments responded to every problem with more spending, more debt and more regulation, the new U.S. strategy creates a significant difference, and the results are much better. ​

Inflation under control

The most significant deviation from the consensus narrative came from inflation. The Keynesian consensus that saw no inflation risk in 2021 when government spending and money supply were soaring unanimously warned in early 2025 that tariffs would push inflation to new annual highs, even above the peaks seen under the previous administration. Instead, by November the consumer price index stands at about 2.7%, below prior expectations of 3.0% and galaxies away from the 6–7% ruin scenario sold to the public. ​

Core inflation tells the same story. The underlying index, excluding food and energy, is running at around 2.6%, significantly lower than in September and October 2024, when the same commentators enthusiastically defended the Biden‑era mix of giant spending and rapid Fed rate cuts. Over the twelve months to November, the all‑items index has risen 2.7%, after 3.0% in the previous twelve‑month period, and core inflation has increased just 2.6%. There is no sign of a tariff‑induced inflation wave in aggregate prices, only the inertia from the debt and spending binge inherited in 2024.

If anything, the trajectory suggests that as final data come in—particularly for food and energy components—the reported CPI could end up even lower. Independent analysis shows a 2.5% inflation estimate for November.

The lesson is clear: it was never tariffs that drove the global inflation spike, but a combination of uncontrolled fiscal expansion and central banks monetising deficits. The U.S. experience in 2025 proved this point once again. ​

Deficit, debt, and the politics of discipline.

While many advanced economies continue to drift into deeper deficits and higher debt, the U.S. has managed a rare success: combining growth with early signs of fiscal consolidation. The federal deficit has fallen by roughly 22%, from about 2.07 trillion dollars in November 2024 to approximately 1.6 trillion a year later, thanks to a mix of higher tax and trade revenues and spending cuts. Measured as a share of GDP, the deficit has dropped from a disastrous 7.1% inherited from the previous administration to an estimated 5.9%. Considering that almost 97% of the 2025 budget was already spent when the Trump administration took office, due to prior spending decisions and the continuation bills approved in 2024, the deficit reduction is even more commendable. ​

The reduction has been accompanied by a major tax reform. Trump has implemented the largest tax cut in decades, bringing the tax wedge on families below 30%, according to estimates from the Tax Foundation. In most OECD economies, policy has been the opposite: higher taxes on work and capital, justified by short‑term revenue needs but negative for investment and productivity.

On the spending side, the numbers are even more remarkable given the starting point. The new administration inherited a budget almost fully pre‑committed. Continuation bills and prior decisions had already locked in around 97% of federal spending. However, federal outlays still fell by 5.6% in the first quarter of 2025 and 5.3% in the second, with total public spending down 3.1% in the first half of the year. Trump has ordered an 8% cut in federal spending for 2026, signalling that fiscal adjustments are a core policy priority.

Debt dynamics are also encouraging. The new administration took office with federal debt around 36.22 trillion dollars and a legacy of 100% of GDP in committed but unfunded liabilities and roughly 1.5 trillion in previously approved obligations. Despite this poisoned inheritance, the debt has stabilised and edged slightly down to about 36.21 trillion, while the debt‑to‑GDP ratio has declined from roughly 122% to 120%, according to the Federal Reserve and independent analysis figures. Even a modest reversal sends a powerful message. ​

Labour market: native workers improve, and government and immigration shrink.

The labour market picture may be the least understood aspect of the U.S. turnaround. November’s employment report shows the best month for native private‑sector employment in absolute, seasonally adjusted terms since 2015, with real wages rising and a clear shift away from public employment and low‑productivity jobs fuelled by uncontrolled immigration. Weekly real wages are up about 0.8% over the year, and workers in middle- and lower-income categories see real gains of roughly 1.4%. Net real wages after taxes are rising at the fastest pace in years.​

The unemployment rate stands at 4.6%, higher than in Canada, the UK, France, Italy and the Eurozone average.

According to household survey data, native employment has increased from around 130.6 million in November 2024 to 133.3 million a year later—an addition of roughly 2.63 million jobs. Over the same period, foreign employment has fallen modestly, by about 21,000, and total public‑sector employment has dropped by 188,000.

This change—more native private-sector jobs and fewer government- and immigration-dependent jobs—is a huge difference compared with Canada, the UK, or most European economies, where employment gains include large public-sector and heavily subsidised job increases. The U.S. experience shows that a combination of deregulation, tax cuts and stricter control of public payrolls can still deliver better jobs and higher real wages for domestic workers. ​

Trade deals have been a success.

The evidence contradicts the notion that tariffs would destroy America’s position in global trade. The previous administration left behind a massive trade deficit—around 79.8 billion dollars in November 2024, seasonally adjusted, according to the Bureau of Economic Analysis. By September 2025, that deficit had fallen to roughly 52.8 billion, a reduction of about one-third compared with a year earlier. ​

The combination of targeted tariffs, renegotiated trade agreements, and a clearer defence of domestic industry has improved trade flows without triggering the inflation explosion that many had predicted.

Other improvements that matter.

The Trump administration has moved strongly on several fronts: banning central bank digital currencies, rolling back “woke” regulatory and freedom-of-speech limits, healthcare reform, and committing to scrap ten regulations for every new one approved. In foreign policy, Washington has pushed for a peace agreement in Gaza, a more realistic path to a solution in Ukraine based on pressure and sanctions on Russia, and stronger support for the return to democracy in countries like Venezuela. ​

The message for conservatives and centrists in Europe and Latin America is strong: If you want growth, jobs, and lower inflation, you cannot simply replicate the bureaucratic, high-tax, high-regulation model that has left much of the developed world stuck in secular stagnation. Trump may not fit the traditional label of a “classical liberal”, but the results of his first year in office show what a truly reformist conservative government can achieve.

For many in the international policy establishment, the uncomfortable reality is that the United States has delivered what others merely promised: stronger growth, controlled inflation, a narrower deficit, a better labour market for domestic workers, and initial stabilisation of debt. This has been achieved not by expanding the state and suppressing price signals, but by cutting taxes, reducing public spending, deregulating and trusting the private sector to respond. ​

Other advanced economies chose a different strategy: more bureaucracy, higher spending, and aggressive climate and social agendas financed with debt and taxes, and now find themselves in stagnation and a private sector recession despite favourable international energy prices reducing import expenses. ​

One year of Trump’s new term does not guarantee future success, and risks remain—from global shocks to central bank missteps—but it already offers an empirical challenge to the Keynesian consensus recommendations. If the U.S. had followed the net zero, big government and high tax policy suggestions of the mainstream consensus, it would now be in a disastrous fiscal and growth position, and inflation would be much higher, as the UK proves.

Tyler Durden Mon, 12/22/2025 - 10:45

Macron Seeks New Talks With Putin, Forcing 'Alternative' Path To Stalled US Negotiations

Suddenly French President Emmanuel Macron is deciding to revive his diplomacy with Moscow and is stepping in and "stealing the show" - as Politico has newly put it - at a moment US-Russia negotiations have been 'constructive' but largely slow and even stalled.

There's been no breakthroughs in Miami this weekend involving White House envoy Steve Witkoff and his Russian counterpart Kirill Dmitriev, who sat across from Ukrainian national security adviser Rustem Umerov.

Macron's office has said, coming just off a European Council summit which saw a controversial Russian assets confiscation plan for funding Ukraine fail to move forward, that France "welcomed" the idea of new direct talks with the Kremlin, but emphasized that negotiations would happen "in full transparency" for Ukraine and its European allies. "It is welcome that the Kremlin has publicly agreed to this approach. We will decide in the coming days on the best way to proceed," the Elysee said Sunday.

On the so-called reparations plan, Politico writes that "Macron’s extended hand suggests he's looking to return to the spotlight after months of European foreign-policy leadership by German Chancellor Friedrich Merz." The report notes that "Macron played a key role at a gathering of European leaders in sinking the 'reparations loan' from Russia’s frozen assets, which Merz had publicly backed."

Getty Images

Macron had in the opening year of the war been the only Western leader of prominence to directly phone Putin on many occasions, seeking a solution to the crisis in the wake of the Russian army entering Ukraine in February 2022.

Apparently he now wants to take the lead on behalf of Europe in pushing an alternative plan for ending the war, again at a moment engagement on Trump's plan seems to have gone nowhere:

Macron said at last week’s EU summit in Brussels that it would be “useful” for Europe to reach out to Putin to ensure that a peace deal in Ukraine is not negotiated solely by the United States, Russia and Ukraine. “I think that we Europeans and Ukrainians need to find a framework to engage a discussion in due form,” Macron told reporters as the summit wrapped up early Friday morning.

The Kremlin on Sunday "expressed readiness to engage in dialogue" with Macron on the issue, according to Putin spokesman Dmitry Peskov.

From Moscow's perspective, this is another PR and diplomatic 'win' - given the optics are that nearly four years into the war, and European leadership finds itself with little negotiating leverage while knowing Ukrainian forces are losing on the battlefield. 

As Washington and Moscow now control the narrative, Macron wants to step in to force France's say in any future outcome or settlement, rather than wait on the diplomatic sidelines. Arming Kiev to the teeth has done nothing but prolong the needless killing, and perhaps at least some European capitals are beginning to realize this.

The following was just from two weeks ago:

Emmanuel Macron has reportedly warned Volodymyr Zelenskyy that “there is a chance that the US will betray Ukraine on territory, without clarity on security guarantees”, the German magazine Der Spiegel reported, quoting a leaked note from a recent call with several European leaders.

Der Spiegel said it had obtained an English summary of Monday’s call, featuring what it said were direct quotations from European heads of government in which they expressed fundamental doubts about Washington’s approach to the talks.

The French president described the current tense phase of the negotiations as harbouring “a big danger” for Ukraine’s embattled president, according to the summary. Germany’s chancellor, Friedrich Merz, reportedly added that the Ukrainian leader needed to be “very careful”.

Macron admits it would be useful to talk to Putin-

"I see there are people who talk to Putin."

What will happen if the Dimwit in Chief (Kallas) finds out? pic.twitter.com/Sb87fTIDSk

— Chay Bowes (@BowesChay) December 19, 2025

As for the greater realism lately coming from Washington, Vice President J.D. Vance has offered some fresh remarks acknowledging that the issue of territorial concessions in Donbass is hampering the conflict settlement process, and that this is the Zelensky government's doing: "So that territorial concession is a significant hold-up in the negotiations," he stated.

But, he explained, Ukraine knows full well that it will "eventually" lose the rest of the Donetsk region - already nearly under complete control of Russian forces. "The Ukrainians understandably see that as a major security problem, [even as] they privately acknowledge that eventually, they’ll probably lose Donetsk," he emphasized.

Tyler Durden Mon, 12/22/2025 - 10:25

Georgia Power Gets Green Light To Dramatically Grow Grid To Draw Data Centers

Authored by John Haughey via The Epoch Times (emphasis ours),

The Georgia Public Service Commission will allow the state’s largest electric utility to proceed with its $15 billion plan to build nearly 10,000 megawatts of new generation—two-thirds of its present capacity—within a decade to accommodate “large load” demand from data centers.

The Vogtle Unit 3, being constructed by primary contractor Westinghouse, a business unit of Toshiba, near Waynesboro, Ga., in this photo taken in March 2017. Georgia Power/Handout via Reuters

The five-member commission on Dec. 19 unanimously approved a “stipulated agreement” with Georgia Power Company that requires data center developers to pay capital improvement costs related to grid expansion, and that households and small businesses won’t be left with the bill should projected growth not materialize as anticipated.

The decision follows months of contentious debate before the commission, which re-surfaced before the final vote during three hours of laborious discussion on motions filed by advocacy groups questioning the certainty of those assurances, followed by animated public comment dominated by opponents.

Many were ushered out of the commission’s Atlanta chambers, chanting, “Nay, nay, nay! The people say, ‘Nay!’” so the vote could be conducted.

Among opponents’ claims was that the commission, which has until March 2026 to issue its final decision, was proceeding with the vote before two Democrats who defeated incumbent Republicans in a November election could be seated in January.

Many expressed anger over rising electricity costs for Georgia Power’s 2.8 million customers across 155 of the state’s 159 counties. The commission has approved six Georgia Power rate increases since 2023, costing the average household at least $43 a month, or an additional $500 a year, according to the Southern Environmental Law Center, while, at the same time, its profits have increased 40 percent.

In July, the commission imposed a moratorium on Georgia Power rate hikes through 2028, but, as many noted, that freeze only applies to base use charges while exempting “reasonable and prudent” costs it incurred—approximately $860 million—in damage from 2024’s Hurricane Helene that can be “recovered” from customers.

Opponents argued that consumers will eventually be left paying for “stranded assets” in a massive build-out to serve data centers that become obsolete or out of business.

Georgia Power now generates between 14,000 and 15,000 megawatts of electricity, and in 2022, projected it would need 200 to 300 megawatts of grid growth over the next decade.

The 10,000 megawatt expansion—enough electricity to power nine million homes—includes at least 8,500 megawatts between 2029 and 2031. It is the largest projected percentage increase in electricity demand over the next five years in any state nationwide except Texas, according to a November Grid Strategies’ analysis.

The company said in testimony filed with the commission that 80 percent of the projected build-out will serve data center development, which it says will boost state and local economies, and “allow Georgia to contribute to the nation’s focus on the global importance of artificial intelligence and the digital economy.”

According to Florida-based Data Center Map, more than 166 of the nation’s 4,297 data centers are in Georgia—sixth most of any state—with Microsoft, Meta, QTS, and Trammell Crow among hyperscalers operating large-load operations.

But as documented by Baxtel, a data center market tracker, those numbers are poised to dramatically increase—more than 26 data centers are under construction and at least 52 planned within 60 miles of Atlanta.

Not all Georgians are enthused. Concerns over water and energy demands by “server farms” have prompted eight Georgia counties and cities to adopt moratoriums on data center development, including Atlanta, which in September 2024 prohibited data center projects within a 22-mile radius of its Beltline Overlay District.

Microsoft, Meta, QTS, and Trammell Crow are among hyperscalers operating large-load data centers in Georgia. Rick Rycroft/AP Photo ‘Trade Secrets’

Under its “stipulated agreement” with the commission’s Public Interest Advocacy staff, Georgia Power said it agreed to file its next “rate case” in 2028 “in a manner that will ensure incremental revenue from large-load customers will provide benefits of at least $556 million per year, equivalent to $8.50 per month, or approximately $102 per year, for the typical residential customer using 1,000 kilowatt-hours per month.”

Attorneys Jennifer Whitfield, representing Georgia Interfaith Power & Light and Southface Institute, Blan Holman on behalf of the Southern Renewable Energy Association, and Sierra Club’s Curt Thompson claimed in motions that information used in Georgia Power’s calculations are regarded as “trade secrets” so they cannot be reviewed.

They debated for 90 minutes with Georgia Power attorney Brandon Marco and Public Interest Advocacy attorney Christopher Collado about, among other issues, the distinction between public disclosure of proprietary information and requiring that information be “on the record” for those who sign non-disclosure agreements to review.

“We need to know today what the assumptions are in that financial promise if we’re going to enforce it down the road,” Whitfield said, requesting the commission “order Georgia Power to supplement the record with financial information related to showing its work as to what went into the financial stipulation promise.”

Advocates motioned for hearings on what information was provided to the commission and to ask Georgia Power “clarifying questions.”

Commission Chair Jason Shaw denied two motions but said one has merit.

“I will grant the request to schedule a hearing … to determine whether petitioners should be granted access to trade secret information under an appropriate confidentiality group,” he said.

Shaw said advocates “failed to justify” disclosure or hearings on Georgia Power’s confidential calculations, which Collado confirmed his staff has vetted.

Commissioner Lauren “Bubba” McDonald said anxiety is understandable, but misdirected in targeting the commission when it can only review applications for loads of 100 megawatts or more.

“We do not solicit data centers, they are solicited by the Governor’s Office of Economic Development,” he said. “They are solicited by [developers] coming in looking at Georgia because of the reliability of energy this state provides.”

Ultimately, McDonald said, “local governments are the ones that decide if a data center is going in, not the public service commission. I want that to be clearly understood.”

Commissioner Tim Echols, one of two incumbents defeated in November, said he was proud after serving 15 years on the commission that “my last vote” will provide “the power we need to keep the state moving forward until 2031.”

His biggest disappointment is the slow pace of nuclear development, which, he said, is the best way to generate the electricity needed to power AI development.

Hyperscalers “need to take the financial risk for building out America’s nuclear future because it doesn’t appear it’s going to happen any other way, and I do think they ultimately will,” Echols said. “They’re using the bulk of the power, and I think they should pay the bulk of the cost and take the risk.”

Tyler Durden Mon, 12/22/2025 - 10:10

Key Events This Shortened Week: GDP And Durables On Deck As 2025 Closes

For those traders who are still "out there" instead of the slopes of Chamonix mingling with freshly embezzled US tax dollars by way of Kiev, DB's Jim Reid reminds that we’re now entering a very quiet spell for markets before Christmas, with data releases and other headline announcements almost completely drying up. Indeed, there’s only two-and-a-half days left to go for many places, as the US and several European markets are closing early on Christmas Eve, and this week usually sees some of the lowest volumes of the year.

In terms of the week ahead, it’s a pretty quiet one on the events calendar. One thing to note will be a few US data releases, including the delayed Q3 GDP print Tuesday, but that’s very backward-looking and covers the period before the shutdown. Otherwise the more recent data will be the December consumer confidence reading from the Conference Board, also on Tuesday, which will be in the spotlight given the recent downtick in sentiment. In fact, the previous reading for November was the lowest since the Liberation Day turmoil in April. But apart from that, there really isn’t much scheduled.

With little on the calendar this week, this lack of events got Reid thinking about whether anything could disturb the pre-Christmas calm, as we have seen a few occasions when this week has brought heightened volatility.

The best recent example is probably 2018, when you may remember a huge selloff saw the S&P 500 fall -7.7% in the four pre-Christmas sessions. A whole bunch of negative factors converged at once, including a hawkish Fed signalling more hikes to come, weak global data, US-China trade tensions, and the start of a US government shutdown on Dec 22. That selloff deepened further after the US Treasury Department said in a Dec 23 statement that Secretary Mnuchin had spoken with CEOs of the largest US banks, and that the President’s Working Group on financial markets would have a call. So that created huge concern that policymakers knew something that the rest of us didn’t, and the S&P hit its closing low on Christmas Eve.

Another good example, although not quite as fearful, happened in 2022. That was the year central banks hiked aggressively to combat inflation, with global bonds and equities entering a bear market that featured huge bouts of volatility as they kept sinking lower. And the Christmas run-up was no different, with the 10yr Treasury yield surging +26bps in the week before Christmas. That followed an adjustment to the Bank of Japan’s yield curve control policy on Dec 20, which was widely seen as the beginning of the end of Japan’s ultra-loose monetary policy. They permitted the 10yr JGB yield to rise to around 0.5%, up from 0.25% previously, but the effects cascaded globally given Japan’s role as one of the last anchors for low yields. So that led to some dramatic moves right before Christmas, and it was one of the biggest weekly jumps that year for the 10yr Treasury yield.

To be fair, this time last year saw a pre-Christmas Santa rally that took the S&P 500 up +2.9% in the final 3 days before Christmas. But either way, it shows that even if it’s a quiet week on the calendar, we can’t completely dismiss the prospect of a final year-end curveball, which would be in keeping with the constant surprises of 2025 so far. After all, this year has seen a huge regime shift in German fiscal policy in March, the Liberation Day tariffs in April, a direct military conflict between Israel and Iran in June, and the longest-ever US government shutdown over October-November. And that’s before we think about some other long-running themes, including periodic bond market flareups around fiscal policy, fears of a potential AI bubble, and ongoing concern around private credit.

This morning, the main news has been further sharp losses for Japan’s government bonds, which follows the Bank of Japan’s Friday decision to hike rates by 25bps to 0.75%, the highest since 1995. The hike already meant that Japan’s 10yr yield was up +6.9bps last week to close above 2%, and this morning they’re up another +6.9bps to 2.08%, their highest since 1999.

One factor behind that has been the weakness in the Japanese yen, which fell -1.40% against the US dollar on Friday, despite the hike. And this morning, the country’s chief currency official Atsushi Mimura said to reporters that “We’re seeing one-directional, sudden moves especially after last week’s monetary policy meeting, so I’m deeply concerned”. So in turn, that weakness for the yen is seen as raising the chance of another BoJ rate hike and has prompted the latest selloff for JGBs. We’ve seen that echoed across other countries too this morning, with 10yr Australian yields up +5.1bps this morning, whilst the 10yr Treasury yield is up +2.0bps to 4.17%.

For equities however, there’s been a much stronger picture across the board overnight, with gains for Japan’s Nikkei (+1.90%), along with the KOSPI (+1.82%), the CSI 300 (+0.79%), the Shanghai Comp (+0.64%) and the Hang Seng (+0.20%). Looking forward, US equity futures are also pointing higher, with those on the S&P 500 up +0.26%. Moreover, there’s been a fresh rally for precious metals this morning, with gold prices up +1.40% to $4400/oz, which would be an all-time closing high if sustained, and is the first time they’ve reached that level on an intraday basis as well. Similarly, silver prices (+3.25%) are up to a fresh record of $69.34/oz. So that now leaves their YTD gains at +68% for gold and +140% for silver, which would be the biggest for both since 1979, back when oil prices surged after the Iranian Revolution that year led to major supply disruption.

Courtesy of DB, here is a day-by-day calendar of events:

Monday December 22

• Data: UK final Q3 GDP, Italy November PPI, US September Chicago Fed national activity index
• Central banks: ECB’s Simkus, Vujcic and Kazimir speak 
• Auctions: US 2-yr Notes ($69bn)

Tuesday December 23

• Data: US Q3 GDP, preliminary October durable goods orders, November industrial production, capacity utilisation, December Conference Board consumer confidence index, Richmond Fed manufacturing index, Canada October GDP
• Central Banks: RBA minutes from December meeting
• Auctions: US 2-year FRN (reopening, $28bn), 5-yr Notes ($70bn)

Wednesday December 24

• Data: US initial jobless claims
• Central banks: BoJ minutes from the October monetary policy meeting
• Auctions: US 7-yr Notes ($44bn)

Thursday December 25

• Data: Japan November housing starts, December Tokyo CPI (23:30 London time), November jobless rate (23:30 London time), retail sales (23:50 London time), industrial production (23:50 London time)
• Central banks: BoJ Governor Ueda speaks

* * * 

Turning to just the US, the key economic data releases this week are the Q3 GDP and durable goods reports on Tuesday. There are no speaking engagements by Fed officials scheduled this week. 

Monday, December 22 

• There are no major economic data releases scheduled. 

Tuesday, December 23 

• 08:30 AM GDP, Q3 second release (GS +3.6%, consensus +3.2%, last +3.8%); Personal consumption, Q3 second release (GS +2.8%, consensus +2.7%, last +2.5%); Core PCE inflation, Q3 second release (GS +2.86%, consensus +2.9%, last +2.6%): We estimate that GDP rose 3.6% annualized in the initial reading for Q3, following a +3.8% annualized increase in Q2. Our forecast incorporates a further decline in imports (-5.5%, quarter-over-quarter annualized vs. -29.3% in Q2 and +38.0% in Q1) after frontloading ahead of tariff increases boosted imports earlier in the year. We expect a further acceleration in consumption growth (+2.8% vs. +2.5% in Q2) but another quarter of soft residential investment growth (-3.9% vs. -5.1% in Q2). We estimate that domestic final sales rose 2.4% in Q3, and that the core PCE price index increased 2.86% annualized (or 2.86% year-over-year) in Q3.
• 08:30 AM Durable goods orders, October preliminary (GS -3.0%, consensus -1.5%, last +0.5%); Durable goods orders ex-transportation, October preliminary (GS +0.2%, consensus +0.3%, last +0.6%); Core capital goods orders, October preliminary (GS +0.5%, consensus +0.3%, last +0.9%); Core capital goods shipments, October preliminary (GS +0.2%, consensus +0.3%, last +0.9%): We estimate that durable goods orders declined 3% in the preliminary October report (month-over-month, seasonally adjusted), reflecting a decline in commercial aircraft orders. We forecast a 0.2% increase in core capital goods orders and a 0.5% increase in core capital goods shipments—the latter reflecting the sharp increase in orders in the prior month.
• 09:15 AM Industrial production, November (GS +0.1%, consensus +0.1%, last +0.1% [September]); Industrial production, October (GS +0.1%); Manufacturing production, November (GS flat, consensus +0.1%, last flat [September]); Manufacturing production, October (GS -0.1%); Capacity utilization, November (GS 75.9%, consensus 75.9%, last 75.9% [September]) ;Capacity utilization, October (GS 75.9%): We estimate industrial production increased by 0.1% in October and 0.1% in November. Our November forecast reflects strong oil and mining production partially offset by weak natural gas and auto production. We estimate capacity utilization remained at 75.9%.
• 10:00 AM Conference Board consumer confidence, December (GS 91.0, consensus 91.2, last 88.7)

Wednesday, December 24 

• 08:30 AM Initial jobless claims, week ended December 20 (GS 215k, consensus 223k, last 224k)
• Continuing jobless claims, week ended December 13 (last 1,897k)

Thursday, December 25 

• Christmas Day holiday. There are no major economic data releases scheduled. NYSE will be closed. SIFMA recommends that bond markets also close. 

Friday, December 26 

• There are no major economic data releases scheduled. 

Source: DB, Goldman

Tyler Durden Mon, 12/22/2025 - 10:00

Futures Rise, Japanese Yields Surge, Gold And Silver Soar

As we previewed late last week, the Santa Rally is back all right, and US equity futures are trading near session highs with the Nasdaq 100 poised to wipe out December’s losses as revived appetite for technology stocks powered gains across equity markets. As of 8:15am ET, S&P futures are 0.4% higher after the benchmark climbed 0.9% on Friday, the most in close to a month; Nasdaq futures rise 0.6% set to build on Friday’s jump as NVDA jumped 2% on a Reuters report the company sees H200 shipments to China starting by mid-February; Oracle and Micron both climbed more than 2% in premarket trading while most members of the Magnificent Seven megacaps advanced.Tech and mining shares outperformed in Europe. In Asia, benchmarks most exposed to artificial-intelligence demand, including South Korea’s Kospi, also led gains. Global bond markets remained under pressure, led by a second day of losses in Japanese debt following an interest-rate hike by the Bank of Japan. The dollar fell. Gold ($4400) silver ($69) and copper all climbed to record highs.The US economic calendar includes the Chicago Fed national activity index (8:30am). No Fed members scheduled to speak for the session

In premarket trading, Nvidia and Tesla lead gains among the Mag 7 tech stocks as sentiment toward AI-exposed companies improves following Micron Technology’s results last week. Nvidia has told Chinese clients it aims to ship its second-most powerful AI chips to China by mid-February, Reuters reports, citing people familiar with the matter. (NVDA +1.7%, TSLA +1.2%, GOOGL +0.5%, AMZN +0.4%, META +0.4%, MSFT +0.3%, AAPL is little changed).

• Gold and silver miners advance after prices of both precious metals hit record highs. Newmont (NEM) climbs 2% and Coeur Mining (CDE) rises 4%.
• Clearwater Analytics Holdings Inc. (CWAN) is up 8% as a group of private equity firms led by Permira and Warburg Pincus has agreed to acquire the investment and accounting software maker in a deal valuing it at $8.4 billion including debt.
• Honeywell (HON) slips 1% after the industrial conglomerate adjusted its full-year and fourth quarter 2025 guidance to reflect the reclassification of its Advanced Materials business — now Solstice Advanced Materials Inc. — as it discontinued operations following its spinoff on October 30.
• Marvell Technology (MRVL) rises 2% after Citi opened a positive catalyst watch on the chipmaker ahead of next month’s CES conference.
• Rocket Lab (RKLB) gains 4% after saying late Friday that it won a contract to design and build 18 satellites, the company’s largest single contract to date.
• T1 Energy (TE) climbs 7% after it signed a three-year contract to supply Treaty Oak Clean Energy with a minimum of 900MW of solar modules built with domestic solar cells from T1’s planned G2_Austin solar cell fab.

A year-end rally in stocks is taking hold, with investors positive about further gains in 2026, although volumes are set to be thinner in this holiday-shortened trading week. Sentiment has been bullish for three weeks in a row, according to Deutsche Bank strategists. Meanwhile, in commodities, oil rose as Trump intensified a blockade on Venezuela. Gold and silver soared to all-time highs on the escalating geopolitical tensions and bets on Fed rate cuts.

“It has been very remarkable how precious metals’ prices have decorrelated from other assets in recent months,” said Roberto Scholtes, head of strategy at Singular Bank. “Earlier this year, gold prices were materially correlated to the dollar and to high-beta risk assets such as tech stocks and cryptos. But this has been waning gradually, and nowadays they’re running freely.”

The focus on price moves in commodities went beyond record-setting metals, with oil climbing amid heightened geopolitical tensions after the US stepped up a blockade on Venezuela.

Bullishness toward stocks has pushed positioning higher, while fund managers are maintaining record low levels of cash, according to the latest BofA Fund Manager Survey. They are betting on a further rally next year, despite concerns in some quarters over rich valuations, heavy artificial intelligence capex and potentially over-optimistic earnings expectations. Separately, Goldman strategists say the economic outlook is supportive for small-cap stocks, a factor that’s underpriced by the market. The Russell 2000 is likely to advance 10% in 2026, close to the 12% return expected in the S&P 500, they say.

Optimism for a year-end rally in equities are growing after dip buyers late last week supported a rebound in US stocks. While some doubts about the AI trade and elevated valuations persist, optimism over the economy and corporate earnings is helping lift sentiment.

“Markets are riding a risk-on liquidity wave into year-end as resilient US growth underpins earnings next year, while a lower Fed fund rate eases financial conditions,” said Desmond Tjiang, chief investment officer for equities and multi-asset investment at BEA Union Investment. “Fears of AI capex and returns also recede on improving compute economics.”

Unlike the US, enthusiasm for European equities is missing on Monday as the Stoxx 600 slips 0.2% with utilities as well as food and beverage shares among the biggest laggards. Meanwhile, miners outperform as traders monitor the geopolitical outlook in Venezuela. Here are some of the biggest movers on Monday:

• Saipem shares rise as much as 4.3%, the most since July, after the Italian energy services and drilling specialist wins an offshore EPCI Contract Worth $3.1 Billion by QatarEnergy LNG.
• Fresnillo shares climb as much as 3% to a record high, leading a rally in mining stocks as gold, silver and copper prices hit record highs.
• Gruvaktiebolaget Viscaria shares rise as much as 17%, the most in more than a year, after Handelsbanken initiated coverage of the Swedish mining company’s stock with a buy rating, calling its growth potential attractive.
• Rank Group shares decline as much as 9.1%, hitting the lowest level since mid-May, after the gambling firm said its Spanish businesses, Enracha and Yo, were targeted by payment fraud totaling about €7.1 million.
• ASP Isotopes shares plunge as much as 50% in Johannesburg after Bronstein, Gewirtz & Grossman said it is investigating potential claims on behalf of purchasers.
• Fenerbahce shares fall as much as 3.5% in Istanbul to the lowest level since May after state-run Anadolu Agency reported the sports club’s chairman was questioned as part of an investigation into illegal drug use.
• Pantheon Resources shares drop as much as 58%, the most since April 2018, after pausing testing of the Dubhe-1 well, citing cost profile of winter operations and focus on “disciplined” capital allocation.

In rates, Japanese yields remain center stage, with the 10-year segment hitting its highest level since 1999. The yield is 6bps higher today, amid speculation the Bank of Japan may need to raise interest rates more aggressively. This has spilled into other global benchmarks, lifting US, UK and German yields by 1-2bps. US yields cheaper by 1bp to 2bp across the curve with 2s10s, 5s30s spreads steeper by 1.2bp and 1bp on the day. US 10-year yields trade around 4.165%, cheaper by 1.5bp vs. 

In Asia, stocks extended gains, as tech firms tracked their US peers higher in a holiday-shortened week. The MSCI Asia Pacific Index climbed as much as 1.1%, with TSMC and Samsung Electronics supporting the gauge higher. Tech-heavy benchmarks in Taiwan and South Korea led gains in the region with a more than 1.5% increase each. Japan and Hong Kong shares also advanced. Here Are the Most Notable Asian Movers

• Kokusai Electric and Tokyo Electron shares climbed after Morgan Stanley MUFG analysts raised ratings and price targets for the stocks on signs of a recovery in demand for front-end semiconductor equipment. Meanwhile, Nidec shares rose after news the Japanese electronic component company’s founder Shigenobu Nagamori is stepping down from his position as chairman of the board.
• Shriram Finance shares surge to a record after analysts saw Mitsubishi UFJ Financial Group’s $4.4 billion investment improving prospects of a credit rating upgrade.
• Mixue Group shares surge as much as 13% in Hong Kong, the most since March 7, after the Chinese fresh tea maker opened its first store in the US.
• Moore Threads shares rise as much as 4.2% after the company unveiled a new generation of chips aimed at reducing dependence on Nvidia Corp.’s hardware.
• WiseTech shares drop as much as 4.7%, the most since Nov. 18, after Executive Chair Richard White’s investment vehicle RealWise entered into a collar derivative transaction.
• Seatrium shares gain after the offshore engineering company reached an agreement with Maersk Offshore Wind’s affiliate Phoenix II A/S to deliver a wind turbine installation vessel by Feb. 28.
• Kokusai Electric and Tokyo Electron shares climbed Monday after Morgan Stanley MUFG analysts raised ratings and price targets for the stocks on signs of a recovery in demand for front-end semiconductor equipment.
• Daikin shares rose as much as 2.7%, the most since Nov. 20, after SMBC Nikko Securities raised the Japanese air conditioner maker to outperform from neutral on expectations for demand recovery and capital efficiency improvement.
• Nidec shares climb as much as 7.3%, the most since Nov. 11, after news the Japanese electronic component company’s founder Shigenobu Nagamori is stepping down from his position as chairman of the board.

This week’s Treasury auctions kick-off at 1pm New York with $69 billion 2-year notes, followed by $70 billion 5-year notes and $44 billion 7-year notes Tuesday and Wednesday. Before today’s auction, the WI 2-year currently trades around 3.482% which is ~0.7bp richer than November’s sale

In FX, the upside in Japanese yields and officials’ jawboning has supported the yen versus the dollar. Bloomberg’s Dollar Index is down 0.2%, pressured also by the outperformance in AUD, NZD and GBP.

In commodities, as noted above, gold and silver sit at record highs, up 1.6% and 2.8% respectively. WTI crude oil futures are up 1.9% as the US pursues a third tanker in Venezuela. Bitcoin continues to rise, up 1.8%.

The US economic calendar includes September Chicago Fed national activity index (8:30am). No Fed members scheduled to speak for the session

Market Snapshot

• S&P 500 mini +0.4%
• Nasdaq 100 mini +0.6%
• Russell 2000 mini +0.4%
• Stoxx Europe 600 -0.2%
• DAX little changed
• CAC 40 -0.4%
• 10-year Treasury yield +2 basis points at 4.16%
• VIX +0.1 points at 15.05
• Bloomberg Dollar Index -0.2% at 1207.51
• euro +0.2% at $1.1737
• WTI crude +1.2% at $57.17/barrel

Top Overnight News

• U.S. Coast Guard Chasing Another Tanker Involved in Shipping Venezuela Oil: WSJ
• Russian General Is Killed After Car Bomb Explodes in Moscow: BBG
• Paramount Amends Bid for Warner Discovery With New Ellison Guarantee: WSJ
• Trump on Friday said he would call a meeting of insurance companies in the coming weeks to push them to cut prices and stay in the system.
• Trump on Friday announced deals with nine pharmaceutical companies to cut prices on most drugs sold through Medicaid and lower cash-pay prices, while committing to most-favoured-nation pricing for future drugs, according to Reuters. The companies also pledged more than USD 150bln in US manufacturing and R&D investment, agreed to remit some foreign revenues to offset US costs, and received relief from US tariffs in return.
• Charlie Kirk’s Empire Is Lining Up Behind a JD Vance Presidential Bid: WSJ
• Vanke Averts Default as Bondholders Approve Longer Grace Period: BBG
• Japan prepares to restart world's biggest nuclear plant, 15 years after Fukushima: RTRS
• CBS News Pulls ‘60 Minutes’ Segment; Correspondent Calls Decision Political: WSJ
• One of Elon Musk’s Old Enemies Joins the Race to Run GM: WSJ
• Syrians emptied Assad’s prisons. They’re filling up again, and abuse is rife: RTRS
• Toxic Fumes on Planes Blamed for Deaths of Pilots and Crew: WSJ
• The Warner Deal: Cinema owners fear that Netflix or Paramount acquiring Warner could reduce number of theatrical releases or speed time to streaming platforms: WSJ
• Trump names Louisiana governor as Greenland special envoy, prompting Danish alarm: RTRS

Central Banks

• ECB's Kazmir said that the ECB remains flexible and will be ready to step in if needed. He is concerned about the long term growth prospect of the Eurozone.
• Fed’s Hammack (2026 voter) said rates should be held steady into the spring after recent cuts, warning she was inflation-wary, noting November’s 2.7% CPI likely understated 12-month price growth due to data distortions, and suggesting the neutral interest rate was higher than commonly believed, the WSJ reported.
• Former BoJ member Sakurai said the first hike to 1.0% could come around June or July and that the BoJ likely sees the neutral rate sitting somewhere around 1.75%.
• Chinese Loan Prime Rate 5Y (Dec) 3.50% vs. Exp. 3.50% (Prev. 3.50%).
• Chinese Loan Prime Rate 1Y (Dec) 3.00% vs. Exp. 3.00% (Prev. 3.00%).

Trade/Tariffs

• China's Commerce Ministry is to impose levies of up to 42.2% on EU dairy products, effective 23rd December, following its anti-subsidy probe.
• New Zealand concludes free trade agreement with India; deal set to be signed in H1 2026. India and New Zealand are confident of doubling bilateral trade over the next five years.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks kicked off the week with gains across the board as the region coat-tailed on the strength seen stateside. Tech outperformance continued across the region. ASX 200 edged higher as miners tracked gains in gold prices, with the yellow metal buoyed by a weekend packed with geopolitics Nikkei 225 was the clear outperformer as it topped 50.5k as the index cheered the post-BoJ JPY weakness on Friday alongside the global tech rally, whilst simultaneously overlooking the continuing rise in JGB yields. KOSPI was underpinned by its tech sector and following a month-to-date rise in exports. Hang Seng and Shanghai Comp conformed to the risk tone but with upside shallower than the above peers, with the PBoC LPR left unchanged as expected, whilst reports on Friday suggested US lawmakers urged the Pentagon to add DeepSeek and Xiaomi to the list of firms allegedly aiding the Chinese military.

Top Asian News

• Japanese Chief Cabinet Secretary Kihara said will not comment on the forex market; recently seeing one-sided, rapid moves; important for currencies to move in a stable manner reflecting fundamentals; will take appropriate action against excessive moves. Closely watching the impact of higher interest rates while cooperating with the BoJ.
• Japanese Top Currency Diplomat Mimura said he is recently seeing one-sided, rapid moves; will take appropriate action against excessive moves; concerned about forex moves.
• China Vanke (2202 HK) bondholders approve the decision on a vote for 30-day extension of CNY 2bln bond, however rejecting one-year extension for 15th Dec CNY 2bln bond, via Reuters sources.
• Goldman Sachs expect Chinese stocks to continue advancing in 2026, citing easing geopolitical tensions and as investors household savings begin flowing to equities as interest rates fall. Analyst Kinger Lau writes that "we expect the bull run to continue, but at a slower pace". Though the firm highlights some main risks to the upside, including; global recession, AI exuberance, US-China tensions and disinflation. Finally, analysts suggest that the macro / equity-market policies remain in effect which should shift the expected fair value of Chinese stocks upward.

European equities (STOXX 600 -0.2%) are trading lower/flat this morning, with price action fairly rangebound in light newsflow. European sectors are trading with a mostly negative bias. Basic Resources (+1.1%) leads on firmer metal prices, followed by Tech (+0.4%) on positive spillover from the strong Nasdaq close, and Energy (+0.3%) on higher crude amid ongoing geopolitical tensions between Russia-Ukraine and US-Venezuela. On the downside, Utilities (-0.9%), Optimised Personal Care (-0.9%) and Food Beverage and Tobacco (-0.9%) lag.

Top European News

• German Ifo survey finds that 26% of firms expect business to deteriorate in 2026, 59% expect no change, 15% forecast an improvement.

Geopolitics: Venezuela

• US Coast Guard officials over the weekend tracked two oil tankers in international waters close to Venezuela, marking three tankers within the past week. An official suggested that the tanker is subject to sanctions, according to several media reports.
• The Venezuelan government rejected the seizure of a new vessel transporting oil, it said in a statement.

Geopolitics: Ukraine

• US Special Envoy Witkoff said the Ukrainian delegation held productive meetings over three days in Florida with US and European partners, including a separate US–Ukraine meeting, with discussions focused on timelines and sequencing of next steps.
• Ukrainian President Zelensky said broader consultations with European partners should follow recent talks in the US.
• Ukrainian President Zelensky said allies had started to slow supplies of air defence missiles and said Kyiv should stand by the US as mediator on talks with Russia, commenting on French President Macron’s proposal.
• Ukrainian President Zelensky said the situation in the Odesa region was harsh after Russian strikes and said Russia was trying to restrict Ukraine’s access to the sea.
• The Kremlin said changes made by Ukrainians and Europeans to peace proposals did not bring agreements closer or add anything positive, IFAX reported. It said Dmitriev was still in Miami meeting with Americans and would report on the results upon his return to Moscow. Kremlin aide said a trilateral Russia–US–Ukraine meeting was not being discussed.
• Ukrainian President Zelensky said elections could not be held in Russian-occupied parts of Ukraine, could only take place once security was guaranteed, and said Kyiv was working with the US on a stable peace while preparing voting infrastructure for Ukrainians abroad, Reuters reported.
• Ukraine’s deputy prime minister said Russia attacked the Pivdennyi port and was deliberately targeting civilian logistics in the Odesa region.
• Russia’s Defence Ministry said Russian troops had captured Vysoke in Ukraine’s Sumy region and Svitlie in the Donetsk region, according to IFAX and TASS.
• Russia's Kremlin said Envoy Dmitriev will report to President Putin on the US proposals for a possible Ukraine settlement. Adds the US intelligence perception of Putin's aims are mistaken following the Reuters report.
• Russian General Sarvarov was injured in a car explosion in Moscow, via Unn; subsequently, the Russian Investigative Committee said the general was killed in the explosion.
• "TASS: [Russian President] Putin's envoy is likely to hold the next meeting with the US delegation in Moscow", via Al Arabiya.
• Two vessels and two piers were damaged in Russia’s Krasnodar after a Ukrainian drone attack, regional authorities said; damage to piers led to a large fire in the area.
• US Special Envoy Witkoff said weekend meetings between US and Russian delegation were productive and constructive; Russia remains fully committed to achieving peace in Ukraine.

Geopolitics: Middle East

• Israeli PM Netanyahu reportedly plans to brief US President Trump on possible new Iran strikes, according to NBC News. Israeli officials believe Iran is expanding its ballistic missile program. They are preparing to make the case during an upcoming meeting with Trump that it poses a new threat. Israeli officials have announced a Dec. 29 meeting.
• Sources said the biggest risk is a war between Israel and Iran will break as a result of a miscalculation with each side thinking the other plans to attack and try to preempt it, according to Axios.
• Israeli officials warned the Trump administration over the weekend that an Iranian IRGC missile exercise could be preparations for a strike on Israel, according to Axios sources.

US Event Calendar

• 8:30 a.m. ET: Chicago Fed Nat Activity Index

DB's Jim Reid concludes the overnight wrap

For anyone still out there, we’re now entering a very quiet spell for markets before Christmas, with data releases and other headline announcements almost completely drying up. Indeed, there’s only two-and-a-half days left to go for many places, as the US and several European markets are closing early on Christmas Eve, and this week usually sees some of the lowest volumes of the year.

This morning, the main news has been further sharp losses for Japan’s government bonds, which follows the Bank of Japan’s Friday decision to hike rates by 25bps to 0.75%, the highest since 1995. The hike already meant that Japan’s 10yr yield was up +6.9bps last week to close above 2%, and this morning they’re up another +6.9bps to 2.08%, their highest since 1999. One factor behind that has been the weakness in the Japanese yen, which fell -1.40% against the US dollar on Friday, despite the hike. And this morning, the country’s chief currency official Atsushi Mimura said to reporters that “We’re seeing one-directional, sudden moves especially after last week’s monetary policy meeting, so I’m deeply concerned”. So in turn, that weakness for the yen is seen as raising the chance of another BoJ rate hike and has prompted the latest selloff for JGBs. We’ve seen that echoed across other countries too this morning, with 10yr Australian yields up +5.1bps this morning, whilst the 10yr Treasury yield is up +2.0bps to 4.17%.

For equities however, there’s been a much stronger picture across the board overnight, with gains for Japan’s Nikkei (+1.90%), along with the KOSPI (+1.82%), the CSI 300 (+0.79%), the Shanghai Comp (+0.64%) and the Hang Seng (+0.20%). Looking forward, US equity futures are also pointing higher, with those on the S&P 500 up +0.26%. Moreover, there’s been a fresh rally for precious metals this morning, with gold prices up +1.40% to $4400/oz, which would be an all-time closing high if sustained, and is the first time they’ve reached that level on an intraday basis as well. Similarly, silver prices (+3.25%) are up to a fresh record of $69.34/oz. So that now leaves their YTD gains at +68% for gold and +140% for silver, which would be the biggest for both since 1979, back when oil prices surged after the Iranian Revolution that year led to major supply disruption.

The latest rise in bond yields this morning follows several central bank decisions last week, where hawkish-leaning elements pushed yields higher around the world. So for example, the Bank of Japan did their 25bp rate hike as expected but also signalled more were still ahead and said real interest rates were “at significantly low levels”. Meanwhile in Europe, there was ongoing speculation about a potential ECB hike next year, particularly after they upgraded their forecasts for growth and core inflation. So that helped to push 10yr bund yields up +3.8bps last week to 2.89%, their highest level since the German fiscal stimulus announcements back in March.

However, the main exception to that pattern were US Treasuries, whose yields fell after the soft CPI print led investors to price in more rate cuts, with the 10yr yield down -3.7bps last week to 4.15%. That comes as speculation around the next Fed Chair has continued to swirl, and Trump said last week that it would be “someone who believes in lower interest rates”. We got some more headlines on the next Fed Chair last Friday as well, as CNBC reported that Fed Governor Waller had a “strong interview” with Trump, and that BlackRock’s Rick Rieder would be interviewed in the last week of the year. So as it stands the current odds on Polymarket are 56% for NEC Director Hassett, 22% for former Fed Governor Warsh, 12% for Governor Waller, and 6% for Rieder.

In terms of the week ahead, it’s a pretty quiet one on the events calendar. One thing to note will be a few US data releases, including the delayed Q3 GDP print today, but that’s very backward-looking and covers the period before the shutdown. Otherwise today, the more recent data will be the December consumer confidence reading from the Conference Board, which will be in the spotlight given the recent downtick in sentiment. In fact, the previous reading for November was the lowest since the Liberation Day turmoil in April. But apart from that, there really isn’t much scheduled.

With little on the calendar this week, this lack of events got us thinking about whether anything could disturb the pre-Christmas calm, as we have seen a few occasions when this week has brought heightened volatility. The best recent example is probably 2018, when you may remember a huge selloff saw the S&P 500 fall -7.7% in the four pre-Christmas sessions. A whole bunch of negative factors converged at once, including a hawkish Fed signalling more hikes to come, weak global data, US-China trade tensions, and the start of a US government shutdown on Dec 22. That selloff deepened further after the US Treasury Department said in a Dec 23 statement that Secretary Mnuchin had spoken with CEOs of the largest US banks, and that the President’s Working Group on financial markets would have a call. So that created huge concern that policymakers knew something that the rest of us didn’t, and the S&P hit its closing low on Christmas Eve.

Another good example, although not quite as fearful, happened in 2022. That was the year central banks hiked aggressively to combat inflation, with global bonds and equities entering a bear market that featured huge bouts of volatility as they kept sinking lower. And the Christmas run-up was no different, with the 10yr Treasury yield surging +26bps in the week before Christmas. That followed an adjustment to the Bank of Japan’s yield curve control policy on Dec 20, which was widely seen as the beginning of the end of Japan’s ultra-loose monetary policy. They permitted the 10yr JGB yield to rise to around 0.5%, up from 0.25% previously, but the effects cascaded globally given Japan’s role as one of the last anchors for low yields. So that led to some dramatic moves right before Christmas, and it was one of the biggest weekly jumps that year for the 10yr Treasury yield.

To be fair, this time last year saw a pre-Christmas Santa rally that took the S&P 500 up +2.9% in the final 3 days before Christmas. But either way, it shows that even if it’s a quiet week on the calendar, we can’t completely dismiss the prospect of a final year-end curveball, which would be in keeping with the constant surprises of 2025 so far. After all, this year has seen a huge regime shift in German fiscal policy in March, the Liberation Day tariffs in April, a direct military conflict between Israel and Iran in June, and the longest-ever US government shutdown over October-November. And that’s before we think about some other long-running themes, including periodic bond market flareups around fiscal policy, fears of a potential AI bubble, and ongoing concern around private credit.

Recapping last week’s moves now, global equities navigated several headwinds at the start of the week to recover into the weekend, with the S&P 500 ultimately closing up +0.10% for the week. Concerns over AI valuations had been an issue in the middle of the week, with Oracle struggling after the FT reported that Blue Owl Capital wouldn’t back a $10bn deal for Oracle’s data centre in Michigan. However, the soft US CPI report and a more positive earnings release from Micron helped things turn around into the weekend, and the Magnificent 7 ultimately posted a +1.48% gain for the week.

That US CPI report was critical because it kept open the prospect of further rate cuts from the Fed next year. Admittedly, there were questions about the data’s methodology given the government shutdown, but the print was still viewed as soft enough to make Fed rate cuts more likely. So the headline CPI rate was down to +2.7% year-on-year (vs. +3.1% expected), whilst core CPI hit its lowest since early 2021 at +2.6% (vs. +3.0% expected). Earlier in the week, we also had the delayed jobs report for November, which showed the unemployment rate ticking up to 4.6%, whilst it showed payrolls had fallen by -105k in October, before rebounding by +64k in November. So overall, that kept up the momentum behind further rate cuts, with 60bps of further cuts priced in by the December 2026 meeting at the close on Friday. In turn, US Treasuries rallied across the curve, with the 2yr yield (-3.9bps) down to 3.48%, whilst the 10yr yield (-3.7bps) fell to 4.15%. US credit spreads saw little movement however, with IG spreads widening +1bp last week, whilst HY spreads were unchanged.

In Europe, equities put in a stronger performance, with the STOXX 600 (+1.60%) closing at a new record. In part, they were supported by signs of progress on the Ukraine peace talks, and Brent crude (-1.06%) fell back to $60.47/bbl, whilst yields on Ukraine’s 10yr dollar bonds fell to their lowest since March. In the meantime, the ECB left their deposit rate at 2%, although some hawkish tones also saw yields on 10yr bunds (+3.8bps), OATs (+3.5bps) and BTPs (+3.7bps) move higher. Otherwise, the Bank of England delivered a 25bp cut, taking their policy rate down to 3.75%, albeit in a close 5-4 vote that saw the rest prefer to keep rates on hold. Meanwhile, Euro IG credit spreads were unchanged last week, whilst HY spreads were +1bp wider.

Tyler Durden Mon, 12/22/2025 - 08:30