Bank of Canada Warns of Market Shock Amid Trump’s Volatile Tariff Agenda

Economic

Summary:

The Bank of Canada (BoC) has warned that the unpredictability of U.S. trade policy under President Donald Trump could destabilize Canada’s financial markets, trigger a recession, and strain the country’s banking system....

Trade Policy Volatility Becomes a New Financial Threat

While Canada’s financial stability had shown signs of improvement over the past year—buoyed by falling interest rates and reduced household debt—BoC’s latest financial system review highlights a sharp shift in concern. The bank now views the erratic nature of U.S. tariff policy as a major emerging risk, capable of sparking systemic stress across Canadian financial markets.

According to Governor Tiff Macklem, the volatility inherent in Trump’s protectionist trade stance can inject severe market instability and liquidity tension. BoC cautions that in worst-case scenarios, such volatility may impair market functioning altogether and disrupt capital flows.

From Domestic Stability to External Shocks

Canada’s internal financial conditions have improved since early 2023, thanks to aggressive interest rate cuts. BoC has reduced its policy rate from a peak of 5% to 2.75% across seven cuts since June last year. This policy easing helped households refinance mortgages and reduce near-term default risk.

However, BoC stresses that this domestic resilience is increasingly at risk from external shocks—primarily due to the Trump administration’s abrupt and unpredictable trade decisions. The imposition of punitive tariffs on Canada, along with dozens of other countries, has already destabilized markets and raised fears of a global slowdown.

The April 2 announcement of sweeping U.S. tariffs triggered an immediate downturn in equity markets, followed by a severe sell-off in U.S. Treasury bonds and the U.S. dollar. Investors fled traditionally safe assets, amplifying stress on leveraged positions held by hedge funds and institutional investors.

A week later, Trump hinted at delaying further tariff hikes amid rising bond yields and market panic, temporarily calming sentiment. However, BoC warns that this brief reprieve does not eliminate the underlying volatility risk, particularly given the short-term nature of the policy pause.

Systemic Risk to Canada’s Banking Sector

Governor Macklem warns that escalating trade conflict could push Canada into a recession. With household and corporate debt still elevated, even modest financial stress could trigger widespread defaults. A spike in non-performing loans would force banks to curtail lending, compounding economic contraction.

This systemic fragility is especially pronounced given Canada's exposure to global trade dynamics and its tight financial linkages with the United States. The BoC emphasizes that sustained policy unpredictability could lead to rapid asset price revaluations, persistent liquidity pressures, and prolonged financial instability.

While the BoC had recently shifted its focus away from domestic mortgage risks, the growing influence of cross-border economic shocks has pulled external risks back to center stage. The trade-centric nature of the Canadian economy makes it particularly sensitive to shifts in global tariffs and investor sentiment.

Uncertainty Surrounds Trade Negotiation Outcomes

Ongoing trade talks between the U.S. and its partners, including China, the UK, and Canada, offer a potential pathway toward easing global tensions. Canadian Prime Minister Mark Carney met with Trump in Washington, expressing optimism over renewed trade engagement. However, the success of these talks remains highly uncertain.

BoC underlines that without sustained diplomatic progress, trade policy shocks could reignite market turmoil. The central bank’s message is clear: financial stability now depends not only on domestic policy but on the evolving dynamics of American political strategy.

Vigilance Amid Rising External Vulnerabilities

BoC’s latest warning illustrates the interconnectedness of global economic policies and national financial stability. Even as Canada manages its internal challenges through monetary easing, it remains vulnerable to externally generated crises.

As Trump’s trade agenda continues to oscillate, investors, regulators, and policymakers will need to prepare for renewed volatility. The Canadian economy, while resilient, may not be immune to the fallout from a misfiring global trade system—and the next policy shock could test the boundaries of that resilience.

Source: Financial Post

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Economic

A Rapid Shift in Investment Sentiment

Bloomberg reports a rising wave of divestment from U.S. assets by Asia’s wealthiest investors and family offices. The trend, which has intensified in recent months, signals a sharp pivot in asset allocation strategies that were once heavily tilted toward U.S. equities and Treasury securities. This recalibration is driven largely by fears over unpredictable trade policies under President Donald Trump, mounting geopolitical tensions, and concerns of a looming economic slowdown.

Notably, one asset management firm serving Chinese billionaires has already exited all its U.S. positions, while other institutions report portfolio reductions of up to 60%. In their place, investors are turning toward cash, gold, and regional markets like China and Hong Kong, seeking both capital preservation and more favorable valuations.

Risk Aversion and Policy Uncertainty Drive the Exodus

Interviews with over ten wealth managers and financial advisors reveal a common thread: heightened caution amid policy unpredictability. These advisors oversee billions in assets and confirm they are either pausing new U.S. investments or accelerating withdrawals—particularly from equities and U.S. Treasury holdings.

The catalyst is not rooted in any single event but rather a broader erosion of confidence. According to Henry Hau, CEO of Hong Kong-based Infinity Family Office, many families that previously weathered the dot-com bust, the 2008 financial crisis, and the Asian debt meltdown are now, for the first time, rebalancing away from U.S. markets. Portfolios are being shifted by as much as 20–30% toward Chinese and European assets.

This behavior represents a break from decades-long patterns, in which U.S. markets were viewed as the ultimate safe haven. Despite past market turmoil, the depth and liquidity of Wall Street always attracted Asian capital. Today, that view is being challenged—not by fundamentals alone, but by political and regulatory risks perceived as increasingly unmanageable.

Markets React: Asia Benefits, U.S. Falters

The reallocation is already influencing performance indicators. The Hang Seng Index in Hong Kong has risen over 13% this year, in contrast to a 3% decline in the S&P 500. Analysts suggest this divergence reflects the relative optimism among Asian investors about their home markets and the dimming appeal of U.S. assets amidst shifting global capital flows.

Legal advisor Clifford Ng of Zhong Lun, who counsels high-net-worth families, confirms that clients are actively re-evaluating global allocations. Similarly, Carman Chan of Click Ventures notes that both her firm and her clients are locking in profits from the U.S. and deploying fresh capital into Asia, especially into China and Hong Kong, where asset valuations remain compelling.

Broader Repercussions and Unresolved Contradictions

This shift, though notable, is not yet universal. While some family offices have already exited or heavily reduced their U.S. exposure, others are maintaining their positions, seeing long-term value in U.S. equities despite short-term risks. Three senior executives interviewed by Bloomberg reiterated their belief that the U.S. remains an irreplaceable safe haven, especially for institutional-grade investments.

Moreover, repatriating capital to mainland China remains a sensitive issue. Beijing’s regulatory tightening, coupled with inconsistent support for private enterprise, leaves some ultra-rich families cautious about overexposure to domestic risks. Many await stronger signals from the Chinese leadership, particularly from President Xi Jinping, to re-establish trust in local market governance.

Additionally, upcoming trade negotiations between the U.S. and China have created a sense of wait-and-see. There remains hope that President Trump may soften or reverse tariff measures as quickly as he imposed them, especially if political or economic calculations change.

The Long-Term Outlook: Correction or Realignment?

Whether this capital retreat marks a short-term tactical shift or the beginning of a long-term decoupling from U.S. markets is still unclear. Historically, moments of extreme caution among global elites have sometimes reversed quickly with renewed market stability or geopolitical compromise.

However, this current wave of caution seems rooted in structural rather than cyclical concerns—particularly the erosion of trust in global trade norms, legal protections, and the perceived politicization of economic policy in the U.S. As Clifford Ng succinctly put it: “If agreements, ownership rights, and treaties can’t be trusted, investors have little choice but to pull out.”

Source: Bloomberg

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Stocks

Renewed Global Appetite for Asian Stocks

In a striking reversal of sentiment, global funds have staged a sustained buying spree in Asian equities, excluding China, marking the longest consecutive inflow streak in over a year. According to Bloomberg data, these funds purchased USD 9.64 billion worth of stocks in Asian emerging markets over the past three weeks, underscoring growing investor confidence in the region.

The MSCI Asia-Pacific index (excluding Japan) surged nearly 16% over the past month—almost double the gains of the global equity benchmark. Notably, Southeast Asia saw USD 280 million in net inflows in the week ending May 2, the highest since September 2025.

Currency strength has played a pivotal role in attracting these flows. As the U.S. dollar weakened, Asian currencies—particularly the Taiwanese dollar (up over 9%), Korean won, Singapore dollar, and Malaysian ringgit (each up more than 3%)—rallied, making regional stocks more attractive when measured in dollar terms.

Currency Gains and Tariff Sentiment Drive Capital Shift

Stronger regional currencies not only improve the dollar-adjusted return on local equities but also signal market optimism about underlying economic stability. Suresh Tantia of UBS Global Wealth Management noted that rising currencies typically correspond to equity inflows as investors seek returns in appreciating markets.

This influx comes despite ongoing U.S. tariff pressures, which have traditionally weighed on Asia due to its trade dependency. However, investors are now betting that aggressive tariff policies may backfire on U.S. growth, weakening the dollar and supporting risk appetite in Asia.

Phoenix Kalen of Société Générale emphasized that ongoing diversification away from dollar-based assets—combined with cautious optimism around U.S.–Asia trade negotiations—has strengthened investor conviction in Asia’s relative appeal.

Earnings Resilience Favors Emerging Asia

Beyond currency factors, corporate earnings in Asian emerging markets are forecast to recover more robustly than their U.S. counterparts, especially under persistent tariff regimes. According to HSBC estimates, a 10% tariff could shave 7% off earnings in emerging Asia, compared to a more severe 10–15% hit for U.S. firms more exposed to trade frictions and global supply volatility.

This differential reinforces the view that Asian firms may be better positioned to absorb external shocks, particularly those with diversified export markets and lower valuations. As a result, investors are repositioning to capitalize on this earnings advantage.

Cautious Optimism Amid Policy and Recession Risks

Despite recent inflows, analysts remain measured in their outlook. The potential breakdown of trade talks between the U.S. and China—scheduled in Switzerland later this week—could reignite uncertainty. Although President Trump hinted at reducing tariffs from 145% to 80% on Chinese goods, the revised level remains high and could still weigh on global economic momentum.

JPMorgan strategists warned that emerging markets typically underperform in recessionary periods and advised against aggressively chasing the rally until the macroeconomic outlook becomes clearer. Persistent concerns about inflation, interest rates, and geopolitical instability could still derail risk sentiment.

Nevertheless, other strategists highlight Asia's structural investment case. Timothy Graf of State Street Markets observed that Asian equities remain underrepresented in global portfolios and have been undervalued for years. If global trade tensions ease, the region could see significant valuation re-rating and capital reallocation.

Asia Positioned for Long-Term Allocation Upswing

The recent surge in equity inflows underscores a broader realignment in global capital, where investors are rotating out of U.S.-centric assets and into more geographically diverse and valuation-friendly opportunities. Asia, buoyed by currency resilience, solid corporate fundamentals, and relatively lower tariff exposure, is emerging as a preferred destination.

Still, the momentum remains sensitive to the outcomes of high-stakes trade diplomacy and broader economic signals. If tensions continue to ease and earnings stabilize, Asia may not only retain but expand its share in global equity portfolios.

Source: AFR

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Cautious Response to Opposition-Backed Tax Cut Proposals

In the face of persistent inflation and growing voter concerns over living costs, Japan’s opposition parties have rallied behind a proposal to cut the consumption tax, currently set at 8% for food and beverages and 10% for other items. This proposal, strategically timed ahead of the upcoming summer Upper House elections, has sparked intense political debate within the ruling coalition led by the Liberal Democratic Party (LDP) and its partner, Komeito.

However, Prime Minister Ishiba and senior government officials have expressed reservations about this approach. The core of their concern lies in the potential loss of a key revenue stream that supports Japan’s extensive public services and debt obligations. With Japan’s public debt already among the highest in the developed world, Ishiba argues that any reduction in tax intake must be weighed carefully against long-term fiscal responsibilities.

Balancing Inflation Control and Budget Integrity

The rationale behind cutting the consumption tax to address inflation is based on the assumption that lower indirect taxes would ease consumer prices by reducing retail cost pressures. However, the effectiveness of this measure depends on whether businesses pass the tax savings on to consumers and whether the increased consumption can offset revenue losses through broader economic stimulation.

In Japan’s case, inflation is being driven not only by domestic demand but also by imported energy and food prices, exacerbated by yen depreciation. Thus, a reduction in consumption tax may have a limited and uneven impact on the overall inflation rate, particularly if structural cost-push factors remain unaddressed.

There is also a question of correlation versus causation: while a tax cut may coincide with temporary price stability, it does not directly address the root causes of inflation, such as global commodity trends or supply chain constraints. In fact, the expected decline in fiscal revenue could undermine confidence in Japan’s long-term economic management, potentially pushing up bond yields and government borrowing costs.

Internal Frictions Within the Ruling Coalition

The LDP is currently split on the issue. While some members are open to using tax adjustments as a political lever to gain electoral support, others emphasize that any short-term gain could be offset by long-term fiscal pain. Komeito, the junior coalition partner, has expressed conditional support for targeted tax relief, but not a sweeping rate reduction.

The coalition is concurrently preparing an economic stimulus package, suggesting that policymakers are seeking alternative tools to support households without undermining revenue. These may include energy subsidies, direct cash transfers, or targeted support for low-income groups—measures considered more fiscally controlled than blanket tax cuts.

External Trade Pressure Complicates Fiscal Calculus

Parallel to the domestic fiscal debate, Japan is also navigating tense trade negotiations with the United States. Washington has urged Tokyo to increase imports of American autos and agricultural goods, while maintaining high tariffs on Japanese exports including steel, aluminum, and some automotive categories.

Ishiba reaffirmed that Japan will persist in seeking the full removal of such tariffs. On the agricultural front, he acknowledged that Japan could potentially expand imports of US corn, citing its use in biofuel production. However, these trade dynamics further complicate Japan’s policy space, as any shift in trade volume or tariff arrangements could influence domestic prices and budget planning.

A Strategic Decision With Fiscal and Political Implications

Whether to cut consumption tax as a way to ease inflation thus emerges not just as an economic decision, but a multidimensional policy dilemma. Prime Minister Ishiba’s cautious stance reflects a deeper recognition that while fiscal tools must respond to inflationary pressure, they must also preserve budgetary discipline—particularly in a nation with long-standing structural debt.

The government may ultimately opt for a compromise: avoiding direct tax rate reductions while deploying targeted subsidies or expanding public investment to stimulate demand without jeopardizing fiscal credibility.

Source: Kyoto News

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China–U.S. Trade War

A Diplomatic Reset Framed as Progress

Speaking via his social media platform Truth Social on May 11, President Trump characterized the initial day of trade talks with China as not only “very good” but a “friendly and constructive reset” of bilateral economic relations. He emphasized that the United States seeks greater market access in China for American firms, describing the effort as beneficial for both countries.

Although Trump celebrated what he called “MAJOR PROGRESS,” he did not disclose any specific agreements or breakthroughs. The absence of details underscores that while the tone may have shifted, the substance of the negotiations remains in flux.

Backdrop of Tariff Escalation and Mutual Retaliation

The Geneva meeting, lasting about eight hours, marked the first face-to-face engagement between senior US and Chinese officials since the dramatic escalation of tariffs between the two nations. Current US tariffs on Chinese goods now stand as high as 245%, following cumulative hikes totaling 145% under Trump’s administration. In retaliation, Beijing has imposed tariffs reaching 125% on US products.

This punitive trade climate has effectively stalled the nearly USD 600 billion annual bilateral trade, disrupted global supply chains, and sent shockwaves through financial markets. President Trump’s recent decision to extend tariffs to dozens of other countries further intensified these dynamics, raising fears of a broader global downturn.

While both delegations maintained tight security and refrained from media engagement, their physical presence in Geneva suggests a mutual recognition of the need to de-escalate trade tensions, even if their narratives diverge. The Chinese delegation has insisted the talks were initiated by the US, whereas Trump claims China made the first overture.

Competing Narratives and Lack of Tangible Outcomes

Despite the diplomatic framing, fundamental differences persist. The US side seeks to reduce its USD 295 billion trade deficit with China and encourages a shift away from what it sees as a state-led mercantilist economic model. This includes pressuring China to increase domestic consumption and reduce dependency on export-driven growth.

Beijing, however, rejects accusations of unfair trade practices and accuses Washington of interfering with its internal policy framework. Chinese officials continue to demand the removal of all tariffs while calling for clarity on what specific US goods Washington wants China to import in greater quantities.

These conflicting expectations highlight why tangible outcomes remain elusive. Although President Trump floated the idea of reducing tariffs to a still-high 80%, this is the first instance he has suggested any concession. His spokesperson, Karoline Leavitt, later clarified that any tariff reduction would be contingent upon concrete Chinese commitments.

Skepticism from Economists and Observers

Economic analysts remain cautious. While the resumption of dialogue itself is welcomed, most agree that the odds of a near-term resolution are low due to entrenched political positions and domestic pressures on both sides. The talks are occurring under a cloud of skepticism fueled by years of tit-for-tat escalation, interrupted negotiations, and shifting political narratives.

Swiss Economic Minister Guy Parmelin, who hosted private meetings with both delegations on May 9, called the launch of negotiations “an initial success” but stopped short of expressing optimism about immediate outcomes. He noted that simply agreeing on a roadmap for continued dialogue would mark meaningful progress and could help reduce tensions.

Implications for Global Trade and Economic Stability

The outcome of these talks holds significant implications not only for the US and China but for global trade stability. The current standoff affects key industries and financial markets worldwide, from semiconductor supply chains to agricultural exports. Investors and multinational firms are closely monitoring developments for signs of de-escalation.

If the negotiations fail to deliver a structured path forward, both economies risk further fragmentation of their trading relationships, potentially accelerating the decoupling of the world’s two largest economies. On the other hand, even incremental progress in Geneva could lay the groundwork for a gradual normalization of trade, especially if it includes confidence-building measures like partial tariff reductions or sector-specific agreements.

Source: Yahoo Finance

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Demographic Trends Threaten Long-Term Economic Growth

The Korea Development Institute (KDI) has issued a stark warning that South Korea’s potential economic growth could approach zero by the 2040s if the country fails to enact sweeping reforms. Currently, the potential growth rate is estimated to hover above 1%, but KDI anticipates a persistent downward trajectory driven largely by demographic shifts.

A rapidly shrinking working-age population is central to this concern. Starting around 2030, this demographic contraction is projected to reduce labor supply significantly, thereby weakening a key engine of economic expansion. As the population ages and fewer young people enter the workforce, labor shortages may begin to constrain productivity and investment, gradually eroding the country's growth foundation.

Delayed Reforms Could Accelerate Economic Decline

While the threat of stagnation is projected to peak in the 2040s, KDI warns that a lack of timely policy intervention could bring about earlier-than-expected economic decline, potentially beginning in the early 2030s. The longer structural reforms are delayed, the more difficult it will become to reverse the slowdown or shield the economy from long-term risks.

This risk is amplified by the fact that demographic changes are irreversible in the short term. Unlike cyclical fluctuations, declining birth rates and aging populations exert long-lasting pressure on economic fundamentals, making reactive policy solutions insufficient. Thus, proactive, strategic planning becomes essential to preempt stagnation.

Policy Solutions: Labor Market and Innovation

To counteract the looming threat, KDI urges the government to prioritize structural reform across multiple dimensions. A key recommendation is the creation of an innovation-friendly business environment to stimulate entrepreneurship and enhance productivity. Strengthening support for high-tech industries and removing regulatory bottlenecks are among the proposed measures.

Improving labor market efficiency is equally critical. This includes revising labor laws to increase flexibility, enhancing job mobility, and ensuring fairer access to employment opportunities. In particular, increasing labor participation among women and elderly citizens could partially offset the demographic drag.

Attracting foreign labor is another strategic move being considered. This would help fill labor shortages in critical sectors and sustain economic activity without overwhelming domestic social systems. However, such a policy shift would also require adjustments in immigration policy and integration frameworks.

Fiscal Pressures in an Aging Society

The fiscal dimension of the challenge is also becoming increasingly evident. South Korea maintained a modest average budget deficit of just 1.4% of GDP from 2011 to 2019. However, post-pandemic stimulus measures and welfare costs pushed this figure to approximately 4%, placing mounting pressure on the government’s fiscal capacity.

An aging population will further increase demand for healthcare, pensions, and social services, potentially straining public finances in the absence of new revenue sources or expenditure reforms. KDI underscores the need for a sustainable fiscal strategy that can accommodate demographic shifts without jeopardizing macroeconomic stability.

Strategic Planning Needed to Avoid Stagnation

KDI’s report functions as both a forecast and a call to action. It highlights that South Korea’s economic slowdown is not an abstract possibility but a foreseeable scenario rooted in quantifiable trends. The correlation between demographic shifts and declining growth potential illustrates a structural relationship that must be addressed with policy foresight rather than short-term fixes.

Strategic reforms, especially those that enhance labor productivity, broaden the workforce, and recalibrate fiscal policy, are essential to ensure that South Korea maintains its status as a developed, innovative economy in the coming decades. Without decisive action, the risk of prolonged economic stagnation will become increasingly probable—and eventually, irreversible.

Source: The Korean Times

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Widening Budget Deficit Undermines Fiscal Discipline Narrative

The latest data from the Congressional Budget Office (CBO) reveals a concerning fiscal trajectory for the United States. As of the current fiscal year, the federal deficit has expanded by an additional USD 196 billion, primarily due to surging expenditures in defense, immigration, and social welfare programs. Since the beginning of the fiscal year on October 1, government spending has increased by USD 342 billion compared to the same period the previous year, while revenues rose by only USD 146 billion—driven mostly by a 7% jump in personal income tax collections.

In contrast to campaign promises of fiscal restraint, federal spending exceeded USD 166 billion in just the first three and a half months of President Trump’s new term, exposing a widening gap between budget rhetoric and fiscal outcomes. Military spending alone rose by USD 39 billion over the 2024 fiscal year, and the Department of Homeland Security saw an USD 18 billion budget expansion.

The most substantial burden on the federal budget stems from social security and welfare programs, which consumed nearly USD 1.5 trillion by May 2025, a USD 70 billion increase from the previous year. This trajectory is accelerating amid demographic aging, particularly as the baby boomer generation enters retirement.

Political Tensions Around Budget Reform and Tax Policy

These developments have intensified political debate in Congress, particularly over comprehensive legislation covering taxation, immigration, and energy. Conservative lawmakers are demanding that any new fiscal package include at least USD 2 trillion in spending cuts. Yet the Republican Party faces challenges aligning budgetary constraints with its policy goals.

President Trump has proposed increasing taxes on individuals earning over USD 2.5 million annually to offset new policy costs. Additionally, lawmakers are exploring creative accounting methods—such as excluding the cost of extending existing policies from official projections—to reduce the apparent fiscal burden. However, fiscal analysts caution that such maneuvers may raise borrowing costs due to persistent reliance on debt financing.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, warned that current fiscal policy is unsustainable and urged lawmakers to pursue genuine structural reform rather than masking the deficit with temporary fixes.

DOGE’s Controversial Role and Dubious Claims

Established by President Trump and headed by Elon Musk, the Government Efficiency Board (DOGE) was envisioned as a transformative initiative aimed at slashing federal spending. Initially targeting USD 2 trillion in savings, DOGE soon revised its goals downward—to USD 1 trillion, then to USD 150 billion. Even that reduced figure appears difficult to substantiate.

BBC Verify has raised serious questions about the credibility of DOGE’s self-reported achievements. While DOGE claims it saved USD 160 billion by April 20, fewer than 40% of those savings have been supported with transparent documentation, and only half were accompanied by any form of verifiable evidence.

Numerous cost-saving claims appear inflated or misleading. For example, DOGE cited an USD 8 billion saving from cancelling an immigration contract, but official figures confirm the real value was just USD 8 million. A USD 2.9 billion contract for a migrant child facility in Texas was also listed as a full saving upon cancellation, even though it was never executed. Similarly, a USD 1.9 billion contract with Centennial Technologies had already been nullified during the Biden administration.

Another unverified claim involves an alleged USD 1.76 billion saving from terminating a Defense Department IT contract. In reality, spending on the contract had yet to begin. Furthermore, DOGE’s claim to have saved USD 1.75 billion by halting USAID funding to Gavi, a global health organization, was contradicted by Gavi itself, which reported receiving only USD 880 million and no formal termination notice.

Lack of Transparency Undermines DOGE’s Legitimacy

DOGE’s failure to provide detailed explanations or a functioning press office has compounded skepticism. Despite White House backing, requests for clarification have gone unanswered, leaving independent validation of the group’s activities largely impossible.

While it is plausible that DOGE has achieved limited savings, the lack of transparency and verifiable data raises questions about its effectiveness and undermines public trust. The discrepancy between stated savings and confirmed figures suggests that the board may be overstating its impact to align with political messaging rather than fiscal reality.

Implications for Governance and Fiscal Strategy

The tension between mounting fiscal pressures and the credibility of spending oversight mechanisms exposes a deeper issue in U.S. governance. As the deficit continues to grow despite ambitious promises of reform, the need for coherent, evidence-based policymaking becomes more urgent.

The mismatch between DOGE’s narrative and verified results exemplifies a broader pattern where political optics may override technical accountability. Without rigorous auditing and transparent reporting, institutional efforts to improve fiscal efficiency risk becoming symbolic rather than substantive.

Source: Reuters

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Bank of Canada Warns of Market Shock Amid Trump’s Volatile Tariff Agenda

Trade Policy Volatility Becomes a New Financial Threat

From Domestic Stability to External Shocks

Systemic Risk to Canada’s Banking Sector

Uncertainty Surrounds Trade Negotiation Outcomes

Vigilance Amid Rising External Vulnerabilities

Source: Financial Post

Asian Wealth Quietly Retreats from U.S. Amid Rising Uncertainty and Strategic Realignment

A Rapid Shift in Investment Sentiment

Risk Aversion and Policy Uncertainty Drive the Exodus

Markets React: Asia Benefits, U.S. Falters

Broader Repercussions and Unresolved Contradictions

The Long-Term Outlook: Correction or Realignment?

Source: Bloomberg

Global Funds Rush into Asian Equities Amid Currency Strength and Tariff Hedge

Renewed Global Appetite for Asian Stocks

Currency Gains and Tariff Sentiment Drive Capital Shift

Earnings Resilience Favors Emerging Asia

Cautious Optimism Amid Policy and Recession Risks

Asia Positioned for Long-Term Allocation Upswing

Source: AFR

Can Japan’s Consumption Tax Cut Curb Inflation Without Compromising Fiscal Stability?

Cautious Response to Opposition-Backed Tax Cut Proposals

Balancing Inflation Control and Budget Integrity

Internal Frictions Within the Ruling Coalition

External Trade Pressure Complicates Fiscal Calculus

A Strategic Decision With Fiscal and Political Implications

Source: Kyoto News

Trump Declares 'Complete Reset' of US–China Trade Ties Amid High-Stakes Geneva Talks

A Diplomatic Reset Framed as Progress

Backdrop of Tariff Escalation and Mutual Retaliation

Competing Narratives and Lack of Tangible Outcomes

Skepticism from Economists and Observers

Implications for Global Trade and Economic Stability

Source: Yahoo Finance

South Korea’s Economic Future at Risk: Growth May Stall by 2040 Without Structural Reform

Demographic Trends Threaten Long-Term Economic Growth

Delayed Reforms Could Accelerate Economic Decline

Policy Solutions: Labor Market and Innovation

Fiscal Pressures in an Aging Society

Strategic Planning Needed to Avoid Stagnation

Source: The Korean Times

U.S. Budget Deficit Deepens While Government Efficiency Board Faces Scrutiny

Widening Budget Deficit Undermines Fiscal Discipline Narrative

Political Tensions Around Budget Reform and Tax Policy

DOGE’s Controversial Role and Dubious Claims

Lack of Transparency Undermines DOGE’s Legitimacy

Implications for Governance and Fiscal Strategy

Source: Reuters

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