FED LEADERSHIP SUCCESSION The Federal Reserve is at a critical crossroads. As the central bank prepares for a potential changing of the guard, the latest meeting minutes reveal a hawkish tilt that has sent a clear message to Wall Street: don’t expect a pivot just yet. The Waiting Game Despite intense market speculation, officials voted to hold the policy rate steady, signaling that borrowing costs will likely remain elevated for the foreseeable future. Investors have now locked in their bets, eyeing the June 16–17 meeting as the definitive turning point. Why June? Because that is expected to be Kevin Warsh’s debut as Fed Chair, provided his Senate confirmation aligns with the end of Jerome Powell’s term. Markets are currently pricing in a quarter-percentage-point cut for that session, followed by another in September. A “Goldilocks” Dilemma Recent data has only added fuel to the debate. The Fed finds itself caught between two competing narratives: The Disinflation Argument: January’s Consumer Price Index (CPI) came in softer than expected, suggesting the fight against inflation is being won. The Economic Resilience Argument: Job growth

Deutsche Bank Warns: S&P 500’s Fed-Fueled Gains Face ‘Negative’ Rate Hike Risk in 2026 The S&P 500 has enjoyed substantial gains throughout 2025, largely underpinned by the Federal Reserve’s aggressive interest rate cuts. However, a recent analysis from Deutsche Bank issues a strong cautionary note: this monetary support may be precariously fragile. The bank suggests that a combination of traditional policy rules and impending fiscal stimulus could leave little room for further monetary easing, dramatically escalating the risk that the Fed’s next move could be an increase in rates, not a further reduction. The Looming ‘Negative Tail Risk’ of 2026 Deutsche Bank analysts are urging investors not to overlook a potential “negative tail risk”: an interest rate hike in 2026. This prospect is particularly salient following what has been one of the fastest non-recessionary rate-cutting cycles in decades. “The most significant multi-asset selloffs over the past years (2015-16, 2018, and 2022) coincided with Fed rate hikes,” the analysts pointed out, drawing parallels that should command attention from the investment community. This historical trend highlights the significant sensitivity of financial assets

Federal Judge ,Criticizes Supreme Court’s Handling of Trump Cases In an unusual turn of events, a number of federal judges have criticized the Supreme Court’s handling of cases involving the Trump administration. In rare interviews with NBC News, a dozen judges expressed their frustration over the high court’s practice of overturning lower court rulings with little to no explanation, a trend they say undermines the integrity of the judiciary. The “Shadow Docket” and Its Impact The judges’ primary concern revolves around the increased use of the “shadow docket”—a term coined in 2015 to describe the Supreme Court’s emergency rulings. These rulings are made quickly, often with minimal or no explanation, in contrast to the court’s standard, more transparent process. Historically, such emergency cases were rare, typically limited to last-minute appeals from death row inmates. However, the Trump administration has frequently used this channel to challenge lower court decisions, prompting the Supreme Court to grant these emergency requests in a majority of cases. Ten of the 12 judges interviewed believe this practice leaves them without proper legal guidance and, more critically,

Fed’s Powell Signals September Rate Cut Amid Worsening Job Market The Fed’s Shift: Powell Signals Potential Rate Cuts Amid Job Market Concerns Federal Reserve Chair Jerome Powell recently hinted at a potential shift in monetary policy, suggesting that the central bank may soon need to cut interest rates to support the economy. Speaking at the prestigious Jackson Hole economic symposium, Powell pointed to a weakening labor market, noting that “downside risks to employment are rising.” This marks a significant change in tone, as the Fed has held rates steady for the past eight months. Why a Rate Cut May Be On the Horizon Powell’s remarks come at a time of growing pressure from the Trump administration for lower rates. The administration has argued that a cut would not only stimulate the economy but also reduce the government’s interest payments on its massive $37 trillion debt. While the Fed’s decision-making is independent of political influence, Powell’s comments suggest that economic data is increasingly aligning with the case for a rate cut. He specifically cited “unusual” behavior in the job market as a

ANCHORAGE, ALASKA – A highly anticipated summit between U.S. President Donald Trump and Russian leader Vladimir Putin concluded in Alaska on Friday without any concrete agreements to end the ongoing Russia-Ukraine war. While both leaders described the talks as “productive,” the absence of a clear breakthrough leaves significant questions regarding the conflict’s future and its broader economic impacts. A Symbolic Meeting with Limited Tangible Results The summit began with a notable display of goodwill, as President Putin received a red-carpet welcome and a shared ride in Trump’s presidential limousine. This gesture underscored the friendly tone of the discussions, a point that Putin later lauded, along with Trump’s perceived understanding of Russia’s national interests. Despite initial hopes for a ceasefire or a path to negotiations, President Trump conceded that a deal “hasn’t quite got there,” although he expressed optimism about future progress. Details on any specific points of agreement remained vague, with no concrete announcements made during their brief joint appearance. This lack of specificity has led to concerns about the limited tangible outcomes of the high-profile meeting. Time and Sanctions:

US Trade Tensions Drive ASEAN+3 Closer Together ASEAN+3 Outlook Dims Amid US Tariff Pressures, Reinforcing Urgency for Regional Integration The ASEAN+3 Macroeconomic Research Office (AMRO) has revised its regional growth forecast downward in its latest July update of the ASEAN+3 Regional Economic Outlook (AREO), citing heightened global uncertainties—particularly those stemming from evolving US tariff measures. According to the updated projections, the ASEAN+3 region is now expected to grow at 3.8 percent in 2025 and 3.6 percent in 2026. These forecasts mark a notable reduction from April’s projections of 4.2 percent and 4.1 percent, respectively. The key difference lies in the incorporation of the newly announced US tariffs, which were not factored into the April outlook. The tariffs—part of a broader shift in US trade policy—have cast a cloud over the economic outlook for the region, which comprises the 10 ASEAN member states, along with China, Japan, Korea, and Hong Kong, China. Despite these external pressures, AMRO Chief Economist Dr. Dong He emphasized that ASEAN+3 enters this period of global volatility from a position of relative strength: “Encouragingly, the ASEAN+3 region enters this

What’s Changing for Asia and the World Economy The United States under President Donald Trump has opened a new front in global trade tensions by rolling out a baseline 10% tariff on all U.S. imports, layered with additional, higher duties on selected products and specific trading partners—including several in the Asia‑Pacific. Markets across the region are now grappling with what these measures mean for exporters, supply chains, currencies, and—ultimately—household purchasing power. This in‑depth explainer expands on our initial report, providing added context, scenario analysis, country risk highlights, and a practical checklist for consumers, businesses, and investors in Asia. President Trump’s administration believes that tariffs are the most effective tool to bring manufacturing jobs back to American soil. While an initial 90-day pause was implemented for countries to negotiate deals, this deadline passed on July 9th with only a few agreements reached. Subsequently, revised tariffs were announced for several nations, including many in Asia, with another pause until August 1st. Asia-Pacific Consumers: Feeling the Ripple Effect While the immediate impact of these tariffs is often highlighted for American consumers, who will

Fed’s Signals Possible July Rate Cut as Inflation Cools  Fed’s Bowman Signals Support for July Rate Cut Amid Easing Inflation and Labor Market Concerns Federal Reserve Governor Michelle Bowman has indicated she would support an interest rate cut as early as the Fed’s next meeting in late July. Her remarks reflect growing signs that the central bank may shift toward a more accommodative policy stance due to cooling inflation and early signs of labor market weakness. Speaking at a conference in Prague on Monday, Bowman said recent inflation data has either declined or come in below expectations, suggesting the Fed may no longer need to keep rates at restrictive levels.“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting,” she said, adding that this would help move rates closer to neutral and support the labor market. Her comments follow similar remarks from Fed Governor Christopher Waller, who also said a rate cut could come as soon as July. Tariffs and Inflation: Limited Impact for Now Bowman also said that the inflation impact from

Japan has relinquished its position as the world’s largest creditor nation for the first time in 34 years, according to data released today by the Ministry of Finance. Despite a historic rise in its net overseas assets, Japan was overtaken by Germany, whose stronger current account balance and euro-denominated holdings outpaced Japan’s yen-adjusted totals. As of the end of 2024, Japan’s net overseas assets—the difference between the value of its foreign assets and liabilities—rose 12.9% year-on-year to a record high of ¥533.05 trillion (approximately US$3.7 trillion). This marks the first time Japan’s net overseas assets have exceeded ¥500 trillion. However, this total was insufficient to maintain its long-held status as the top creditor nation, as Germany’s net overseas assets stood higher at ¥569.65 trillion. The Ministry of Finance attributed the growth in Japan’s net overseas assets primarily to the yen’s depreciation, which increased the yen-converted value of the nation’s foreign currency-denominated assets, including overseas stocks, bonds, and direct investments. The yen weakened significantly, with the exchange rate at ¥157.89 to the U.S. dollar at the end of 2024, compared to