MONEY MASTER

The real story isn’t that rates stayed at 3.75%, it’s that the Fed is no longer trying to guide the market every step of the way. The Federal Reserve’s latest decision to hold rates steady isn’t the real story. The bigger shift is how Kevin Warsh is changing the way the Fed operates and how markets must respond. Key Points Fed holds rates at 3.50%–3.75% No forward guidance  — a major policy shift Nearly half of policymakers signal possible rate hikes Inflation still elevated at  ~3.6% for 2026 Warsh launches  broad structural review of Fed policy Markets reacted with  higher yields and equity weakness The market is still treating Warsh like “Powell 2.0” that is likely a mistake. The Real Shift: From Powell to a Modern Greenspan This isn’t just a leadership change, it’s a philosophy shift. Warsh’s approach signals a return to a more classic central banking style: Less guidance  → fewer signals to markets More market discipline  → investors must interpret dat...

China’s state-owned lenders delivered  muted earnings growth in 2025 , highlighting ongoing pressure from  policy-driven lending and shrinking interest margins . Profit Growth Slows Across Major Lenders Agricultural Bank of China  reported  net profit growth of 3.2% to 291 billion yuan , while  Bank of China  posted a weaker  2.2% increase . Similar trends were seen across peers, including  Industrial and Commercial Bank of China  and  China Construction Bank , reflecting  sector-wide earnings constraints . Despite the modest growth, total industry profits still reached  2.38 trillion yuan , up  2.3% year-on-year . Margin Compression Remains Key Headwind The banking sector continues to face a  “double squeeze” : Record-low net interest margins (NIMs) Policy pressure to support economic growth through lending This has limited profitability even as loan volumes expand. Asset Quality Shows Early Signs of Stress While hea...

Expectations for interest rate cuts across developing Asia are rapidly unraveling as surging oil prices from the Iran war revive inflation risks and narrow central banks’ policy room. Key Takeaways Oil surge is reversing rate-cut bets across developing Asia India and the Philippines now seen leaning toward rate hikes Thailand and Indonesia’s easing odds are shrinking fast A sustained 10% oil rise could add up to 0.8ppt to inflation in parts of Asia Oil Shock Reshapes Policy Expectations Brent crude  is trading near US$83 per barrel, heading for its biggest weekly surge since 2022. Overnight index swaps show a dramatic shift: India and the Philippines now pricing potential  rate hikes Thailand and Indonesia still seen cutting, but probabilities falling sharply Malaysia swaps pricing over 30% odds of a 25bps hike within 12 months Key Point: Oil-driven inflation risks are wiping out rate-cut expectations across Asia. Inflation Impact Could Be Significant According to  Overse...

Quick Summary China kept its benchmark lending rates unchanged  for the ninth straight month 1-year LPR stays at  3.0% , 5-year LPR at  3.5% Authorities prefer  targeted tools over broad rate cuts Growth expected to slow to  4.5% in 2026 What Happened China left its benchmark  Loan Prime Rates (LPRs)  unchanged in February: 1-year LPR:  3.0% 5-year LPR:  3.5% The decision marks the  ninth consecutive month of steady rates , suggesting policymakers are  not in a hurry to roll out fresh broad-based stimulus . The rates are set by the  People's Bank of China  (PBOC) . Why No Immediate Cuts? While China hit its  ~5% growth target in 2025 , largely thanks to strong exports, several headwinds persist: Structural imbalances Industrial overcapacity Weak domestic consumption Rising geopolitical tensions A Reuters poll forecasts  growth slowing to 4.5% in 2026 . Key point:  Policymakers appear to be conserving policy ...

The past week delivered a powerful mix of  trade tension, slowing growth, rising inflation, and recession warnings , keeping investors on edge. Here’s what mattered most. 1️⃣ Trump’s 15% Global Tariff Faces Pushback President  Donald Trump  announced a new  10% global tariff , later raised to  15% , after the  Supreme Court of the United States  ruled that trade authority rests with Congress — not the executive branch. The move: Drew opposition from Republican lawmakers Increased legal uncertainty Added to market volatility Policy unpredictability is now a key market risk.  2️⃣ Recession Indicator Flashes Warning US heavy truck sales — a leading economic indicator — are weakening. When fleets expect strong freight demand, they order trucks. When confidence drops, capital spending freezes. The 2025 retreat suggests: Businesses are cautious Forward demand expectations are softening   Early-cycle capital spending is slowing — often a recession p...

Quick Summary Coca-Cola  issued a  2026 sales outlook that slightly missed market expectations , sending shares lower despite continued strength in zero-sugar products. What Happened Coca-Cola guided for  organic sales growth of 4%–5% in 2026 Street expectation:  ~ 5.01% , putting the  lower end below estimates Shares fell  up to 4.1% in premarket trading Key Points to Watch 2026 sales outlook disappointed  on the lower end of guidance Zero-sugar products remain the growth engine , but not enough to fully lift sentiment Policy and regulatory pressure  is emerging as a new overhang Zero-Sugar Still the Bright Spot Coca-Cola continues to benefit from shifting consumer preferences: Coca-Cola Zero Sugar:   +14% growth in 2025 Diet Coke:  +2% in Q4, flat for the full year Demand for  full-sugar sodas continues to decline , while sugar-free, sports drinks, and water gain share This reinforces Coca-Cola’s long-term strategy to diversify be...

Simple Summary China’s key one-year bank funding rate has fallen to a record low PBOC charged some banks as little as 1.5% on policy loans in January Move lowers borrowing costs without headline rate cuts Signals continued, low-key support for economic growth What Happened China’s central bank, the  People’s Bank of China , allowed the interest rate on its  one-year medium-term lending facility (MLF)  to fall to  as low as 1.5% in January , down from  1.55% in December , according to people familiar with the matter. That compares with an  official MLF rate of 2% a year ago , before the PBOC stopped publishing a single benchmark rate. Why This Matters Lower funding costs for banks , encouraging lending Supports an economy facing  deflationary pressure  and a  prolonged property slump Helps stabilise  bank net interest margins , which have been under strain Key point:  This is another example of Beijing’s  “drip-feed” stimulus ap...

  Executive View Singapore’s macro backdrop entering 2026 is  constructively stable . Growth has surprised to the upside, inflation remains contained, and policy credibility is intact. As a result, the  Monetary Authority of Singapore  (MAS)  is positioned to  remain on hold in the near term , preserving optionality rather than pre-committing to either easing or tightening. For investors, this environment supports  measured risk-taking , selective exposure to  Singapore equities and SGD assets , and a bias toward  policy-resilient sectors  rather than directional macro bets. Policy Anchor: Why MAS Can Stay Patient Singapore’s 2025 GDP growth of  4.8%  materially exceeded trend expectations, driven by: Sustained semiconductor and electronics demand AI-linked memory pricing strength Resilient regional trade flows At the same time,  core inflation near ~1%  sits comfortably within MAS’s tolerance band, reducing the need ...

Market Overview Malaysia is expected to  keep its benchmark interest rate unchanged  at its first policy meeting of the year, as  strong economic growth and subdued inflation  give policymakers room to remain patient amid rising global uncertainty. According to a Bloomberg survey, all economists expect  Bank Negara Malaysia  to hold the  overnight policy rate (OPR) at 2.75% , following a single 25-basis-point cut in July 2025. Why BNM Can Afford to Hold Malaysia’s economy ended 2025 on solid footing, outperforming earlier concerns around external shocks. Key supports include: Stronger-than-expected economic growth  in the second half of 2025 Record-high exports  last year, despite fears of US tariff-driven slowdowns Inflation at a five-year low of 1.4% , well below the central bank’s comfort range Together, these factors reduce the urgency for further policy easing. External Risks Are Rising Looking ahead, policymakers remain cautious. Malays...

US stocks staged a sharp rebound after President  Donald Trump  walked back tariff threats against European allies linked to his Greenland push. While markets welcomed the reprieve, the  speed and size of the whipsaw  underscored how fragile sentiment has become — and why volatility may be here to stay. What Happened After a bruising selloff a day earlier, Trump said he would abandon plans to impose levies on Europe, citing a  “framework of a future deal”  involving Greenland. That was enough to trigger a relief rally, though  details remain scarce . Dow Jones Industrial Average :   +1.2%  (~600 points) S&P 500 :   +1.16%  (best day since Nov 24) Nasdaq Composite :   +1.18% Cboe Volatility Index :   -15.9% Key point:   The rally failed to fully erase the prior day’s losses , reflecting lingering uncertainty. The Return of the “TACO Trade” Wall Street’s shorthand —  “TACO” (Trump Always Chickens Out)  — r...

Malaysia’s stock market reached a major milestone as the  FBM KLCI breached the 1,700 level , climbing to its  highest point in more than seven years . The benchmark index opened at  1,700.74 , last seen in  November 2018 , signalling renewed investor confidence in Malaysia’s economic outlook. What’s Driving the Rally Heavyweight buying support  pushed the index past the psychological 1,700 mark Positive sentiment since early January , after the index rallied from around 1,680 on Jan 5 Investors responded favourably to  Prime Minister Anwar Ibrahim’s New Year 2026 message , which emphasised: Reform-led growth Stronger governance and execution Near-term economic support measures These signals reinforced expectations of policy continuity and a more pro-growth environment in 2026. Sector Performance Snapshot Top gainers: Technology Property Construction Lagging sectors: Utilities Transportation Industrial The sector rotation suggests investors are positioning ...

 US stocks and Treasuries fell on Monday, halting a four-day rally as investors grew cautious ahead of the Federal Reserve’s final policy meeting of the year. While a  quarter-point rate cut is widely expected , traders are increasingly concerned about how many cuts will follow in 2026. The  S&P 500  slipped  0.3% , pulling back after closing near a record high last week. A wave of dealmaking failed to lift sentiment — notably overshadowed by President Donald Trump’s warning that  Netflix’s US$72 billion bid for Warner Bros Discovery  may raise antitrust issues. Meanwhile, Paramount Skydance launched a  hostile counteroffer , adding uncertainty to the sector. Stocks have rallied in recent weeks after several Fed officials signalled support for a third straight rate cut on Wednesday. But questions over the  pace of easing next year , combined with doubts about the durability of the AI-driven market surge, weighed on risk appetite. Policy U...