BOJ Debated Need To Keep Raising Rates, October Meeting Minutes Show

Summary:

Bank of Japan policymakers debated the need to continue raising interest rates to levels deemed neutral to the economy with some arguing doing so will help achieve long-term, stable growth, the minutes of their October meeting showed on Wednesday.

A few in the nine-member board also said recent yen declines could lead to an overshoot in inflation by pushing up import costs, the minutes showed.

At the October 29-30 meeting, the BOJ kept interest rates steady at 0.5% but Governor Kazuo Ueda sent a strong signal on the chance of a near-term rate hike. At the subsequent meeting in December, the central bank raised rates to 0.75%.

Source: Reuters

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James Whitman

Commodity

Economic

Platinum soared to an all-time high, trading above $2,300 an ounce for the first time on tight supplies and historically elevated borrowing costs.

The metal rose for a 10th straight session — its longest winning streak since 2017 — and has advanced more than 150% this year, the biggest annual gain since Bloomberg began compiling data in 1987. The recent surge has come as the London market shows signs of tightening, with banks parking metal in the US to insure against the risk of tariffs.

Used in the automotive and jewelry sectors, platinum has been caught up in the wave of investment that poured into precious metals this year. Gold and silver have also risen to records.

More than 600,000 ounces of platinum are sitting in US warehouses — an amount much higher than usual — as traders await the outcome of Washington's Section 232 probe, which could lead to tariffs or trade restrictions on the metal.

Meanwhile, shipments to China have been robust this year, and demand optimism has been bolstered as contracts recently began trading on the Guangzhou Futures Exchange. Prices in Guangzhou have risen well above other international benchmarks.

Platinum is on course for a third annual deficit this year, due to supply disruptions in major producer South Africa. High borrowing costs have also been an issue for manufacturers that use the metal to produce goods ranging from chemicals to glass to laboratory equipment. Industrial users often choose the less capital-intensive option of leasing, rather than buying the commodity outright.

Platinum rose as much as 3.1% to a record $2,361.23 as of 8:19 a.m. in Singapore. Sister metal palladium gained as much as 2.5%.

Source: Bloomberg

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Manuel

Commodity

Economic

Oil prices settled higher on Tuesday as investors assessed stronger-than-expected U.S. economic growth and the risk of disruptions to oil supply from Venezuela and Russia.

Brent crude futures settled 31 cents, or 0.5%, higher at $62.38 a barrel. U.S. West Texas Intermediate crude was up 37 cents, or 0.64%, at $58.38.

Prices had risen by more than 2% on Monday, with Brent registering its biggest daily gain in two months and WTI climbing the most since November 14.

The U.S. economy grew faster than expected, driven by robust consumer spending, the Commerce Department's Bureau of Economic Analysis said in its initial estimate of third-quarter GDP on Tuesday.

"The market is trying to decide whether we should be more excited about the demand coming from the strong growth or worried that the Fed is going to have to put on the brakes on that growth to get inflation under control," said Phil Flynn, senior analyst with the Price Futures Group.

Other data painted a mixed picture of the economy. U.S. consumer confidence deteriorated in December amid deepening anxiety over jobs and income while factory production was unchanged in November after declining in October, data showed on Tuesday.

TRUMP'S VENEZUELA BLOCKADE

Investors were also considering the risk of disruptions to Venezuelan supply.

U.S. President Donald Trump earlier this month announced a blockade of all oil tankers under sanctions entering and leaving Venezuela, which has kept vessel owners on alert.

Panama-flagged very large crude carrier Kelly, which had departed from Venezuela carrying oil last week, has returned to Venezuelan waters following the U.S. interception of more tankers, monitoring service TankerTrackers.com said on Tuesday.

"With dwindling storage capacity in Venezuela, there are rising risks that the country might have to shut in some production," said UBS analyst Giovanni Staunovo.

Tanker loading in Venezuela has slowed, with most ships moving oil cargoes only between domestic ports following U.S. action against more ships.

Trump said on Monday that the U.S. might keep or sell the oil it had seized off the coast of Venezuela.

RUSSIAN SUPPLY DISRUPTED

Disruption to Russian oil supply also supported prices.

Russian forces struck Ukraine's Black Sea port of Odesa late on Monday and damaged port facilities and a ship, the second attack on the region in less than 24 hours, while Ukrainian drone attacks damaged two vessels, two piers and sparked a fire in a village in Russia's Krasnodar region.

Ukraine has also targeted Russia's maritime logistics, focusing on shadow-fleet oil tankers that attempt to bypass sanctions on Russia.

Oil markets are expected to remain well supplied in the first half of 2026, Barclays said in a note this week, but the bank added the oil surplus would shrink to only 700,000 barrels per day in the fourth quarter of 2026 and prolonged disruption could tighten the market further.

U.S. crude inventories rose by 2.39 million barrels last week, while gasoline stocks increased by 1.09 million barrels and distillate inventories rose by 685,000 barrels, market sources said, citing American Petroleum Institute figures on Tuesday.

The U.S. Energy Information Administration is due to release its data on Monday, later than usual due to the holidays.

Source: Reuters

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James Whitman

Political

● US tells UN: transnational terrorist, criminal groups most serious threat to Western Hemisphere

● Russia warns US action could 'become a template for future acts of force against Latin American states'

● Venezuela tells UN: threat is not Venezuela, threat is US government

The United States told the United Nations on Tuesday it will impose and enforce sanctions "to the maximum extent" to deprive Venezuelan President Nicolas Maduro of resources as Russia warned other Latin American countries could be next.

U.S. President Donald Trump's administration has for months waged a campaign of against suspected drug trafficking boats off the Venezuelan coast and the Pacific coast of Latin America. He has threatened strikes on Venezuelan land.

"The single most serious threat to this hemisphere, our very own neighborhood and the United States, is from transnational terrorist and criminal groups," U.S. Ambassador to the U.N. Mike Waltz told the U.N. Security Council.

The U.S. has ramped up its military presence in the region and Trump announced a blockade of all vessels subject to U.S. sanctions. So far this month, the U.S. Coast Guard has intercepted two tankers in the Caribbean Sea, both fully loaded with Venezuelan crude. The Coast Guard is also pursuing a third empty vessel that was approaching the OPEC country's shore.

"The reality of the situation is that sanctioned oil tankers operate as the primary economic lifeline for Maduro and his illegitimate regime. The sanctioned tankers also fund the narco-terrorist group Cartel de Los Soles," Waltz said.

Washington designated Cartel de los Soles, or Cartel of the Suns, as a foreign terrorist organization late last month for the group's alleged role in importing illegal drugs into the U.S. It accuses Maduro of leading Cartel de los Soles. Venezuela's government rejected what it called a "ridiculous" move to designate the "non-existent" group.

"This intervention which is unfolding can become a template for future acts of force against Latin American states," Russia's U.N. Ambassador Vassily Nebenzia told the Security Council, citing a recent strategy document from Trump that said the U.S. will reassert its dominance in the Western Hemisphere.

Waltz spoke after Nebenzia and did not directly respond to his remark.

China urged the United States to "immediately halt relevant actions and avoid further escalation of tensions," China's Deputy U.N. Ambassador Sun Lei told the council.

Venezuela, backed by Russia and China, requested Tuesday's meeting, the second held on the escalating tensions. The Security Council first met in October, when the United States justified its actions as consistent with Article 51 of the founding U.N. Charter, which requires the Security Council to be immediately informed of any action states take in self-defense against armed attack.

"Let it be clear once and for all that there is no war in the Caribbean, there is no international armed conflict, nor is there a non-international one, which is why it is absurd for the U.S. government to seek to justify its actions by applying the rules of war," Venezuela's U.N. Ambassador Samuel Moncada told the council.

"The threat is not Venezuela The threat is the U.S. government," he said.

Source: Reuters

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Manuel

Central Bank

Economic

Treasury Secretary Scott Bessent backed the idea of reconsidering the Federal Reserve’s 2% inflation target once the US has sustainably brought price increases back down to that pace.

“Once we are back to 2 — which I think will be in sight — then we can have a discussion: Is it much smarter to have a range?” Bessent said in an interview on the . “Once we re-anchor to the target, then we can talk about a range.”

The discussion could potentially be framed around a switch to 1.5% to 2.5% or 1% to 3%, Bessent suggested in the interview, which was posted on Dec. 22. “There is a very robust conversation” to be had, he said.

Fed policymakers in 2012 formally and publicly adopted the current 2% target, which is shared by many central banks around the world. Bessent said that the idea of “decimal-point certainty is just absurd.” But he said shifting the target at a time when inflation is running faster than that would risk giving the impression that “when you’re above a level, you’ll always fudge upward.”

The interview was recorded after the Dec. 18 release of the November consumer price index, which showed a 2.7% increase in the level from a year before. The Fed uses a separate gauge, the so-called PCE price index. The PCE climbed 2.8% over the 12 months to September, the most recent reading showed.

People ‘Hurting’

“It’s very difficult to re-anchor until you meet the target and maintain credibility,” Bessent said. He also acknowledged affordability concerns among households — angst that surfaced in off-cycle elections held in November that saw Republican losses.

The Treasury chief said that “we understand that the American people are hurting.” The price level “has gotten very high,” he said, blaming that surge on the Biden administration. Inflation is now “starting to roll down,” thanks in part to declines in rents that had — he argued — been driven up by a jump in undocumented immigrants.

While some economists said the most recent CPI report likely contained measurement issues thanks to federal staff being furloughed during the government shutdown of October and early November, Bessent said he thought “it was a pretty accurate number.” He said while some components, including energy, recorded an increase, observable real-time figures showed they’re coming down.

Bessent also indicated that stabilizing the budget deficit could provide an argument for lower interest-rate levels. He cited an example from Germany before the days of the euro, where the Bundesbank agreed to “foam the runway” and decrease rates in return for the government pursuing a not-profligate “reasonable fiscal balance.”

German Model

“That’s something that we could be doing here,” he said. Germany’s central bank and government “would work with each other hand-in-hand,” he said. He also noted that, before World War II, the Treasury Department “had a seat at the table on the Federal Reserve.”

The Treasury secretary said, “If we can stabilize the budget deficit, even bring it down, then that will contribute to disinflation.”

Bessent, who has been overseeing the process for President Donald Trump selecting a candidate to succeed Federal Reserve Chair Jerome Powell, reiterated his criticism of the US central bank expanding its balance sheet too much and too long after Covid hit.

“Absolutely, large-scale asset purchases should be part of the so-called central bank toolkit,” he said. He also supported the Fed’s emergency powers to aid a strategic industry if needed, saying “it would not have behooved anyone” for the airline industry to collapse during Covid. As for the broader so-called quantitative initiative, “I think that the duration went on much, much too long.”

Source: Bloomberg

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Manuel

Political

The US Supreme Court refused to let President Donald Trump start deploying National Guard troops in Chicago, dealing a setback to his drive to use the military in liberal cities across the country.

Rejecting a Trump request in a 6-3 decision, the court on Tuesday left in force a judge’s ruling that has blocked the deployment since Oct. 9.

“At this preliminary stage, the government has failed to identify a source of authority that would allow the military to execute the laws in Illinois,” the majority said. The government hadn’t shown the president could legally “federalize the Guard in the exercise of inherent authority to protect federal personnel and property in Illinois.”

The case marked the high court’s first look at Trump’s fight to dispatch troops to cities where his immigration crackdown has drawn widespread protests. The ruling means Trump, at least for now, can’t deploy hundreds of troops in the Chicago area.

The court deliberated over the case for more than two months, an unusually lengthy review for a request that claimed government officials were facing an imminent threat. Trump told the justices in his Oct. 17 application that troops were needed “to prevent ongoing and intolerable risks to the lives and safety of federal personnel.”

‘Simply Unreliable’

In issuing a temporary restraining order against Trump, US District Judge April Perry said the administration hadn’t shown that a protest outside a Chicago-area Immigration and Customs Enforcement facility had risen to a level that would warrant a military deployment.

Perry said the Department of Homeland Security’s characterization of the Chicago area as ridden with violence couldn’t be squared with facts on the ground, including the assessment of local law enforcement agencies. At an Oct. 9 hearing she pointed to “the growing body of independent and objective evidence that DHS’s perceptions of events are simply unreliable.”

The Chicago-based 7th US Circuit Court of Appeals left Perry’s order largely intact.

Chicago became less of an immigration flashpoint in the weeks after Perry issued her ruling. The administration shifted resources to other cities, first with an arrest blitz in Charlotte, North Carolina, and then with a surge in New Orleans. More recently, Border Patrol has picked up again in Chicago with the return of Gregory Bovino, the agency’s at-large commander.

Under federal law, the president can call state National Guards into service when the US is facing a “rebellion or danger of rebellion” or the president “is unable with the regular forces to execute the laws of the United States.”

The court suggested last month that it was focusing on the latter provision, asking the two sides to file briefs discussing whether “regular forces” refers to active-duty troops.

‘Judicially Micromanaging’

Trump contends military force is needed to protect federal immigration agents from what he claims are violent protests. Government lawyers said in a Supreme Court filing the 7th Circuit was “controlling the military chain of command and judicially micromanaging the exercise of the president’s commander-in-chief powers, including the decision about which military forces the president can deploy.”

Justice Samuel Alito dissented from the high court’s ruling Tuesday, saying he had “serious doubts” about the majority’s reasoning.

“The Court fails to explain why the President’s inherent constitutional authority to protect federal officers and property is not sufficient to justify the use of National Guard members in the relevant area for precisely that purpose,” Alito wrote, joined by Justice Clarence Thomas. Justice Neil Gorsuch wrote a separate dissent.

Democrats say Trump is engaging in a power grab and ignoring the largely peaceful nature of the protests.

“State and local law enforcement officers have handled isolated protest activities in Illinois, and there is no credible evidence to the contrary,” Illinois and Chicago officials told the Supreme Court.

Perry said in October that tactics used by immigration agents in Chicago so far have only increased the risk of protests, and “evidence demonstrates that the deployment of the National Guard will lead to civil unrest.”

The case is one of several over Trump’s attempts to deploy the National Guard. The administration is appealing a judge’s order that blocked Trump from deploying National Guard troops in Portland, Oregon, a city he has claimed without evidence is “burning to the ground.” A different judge has ruled that he can’t deploy the National Guard in Memphis.

In addition, a federal judge in Washington, DC, ruled that Trump’s deployment of troops there was probably unlawful, though an appeals court ruled last week that they can remain there for now.

Source: Bloomberg

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Manuel

Stocks

Economic

Retail inflows into U.S. stocks are set to hit a record in 2025, as individual investors become a major force behind a rally that is likely to extend into the next year on hopes of interest rate cuts, analysts said.

The amount of cash retail investors poured into U.S. stocks so far in 2025 is up 53% from $197 billion a year earlier and 14% higher than the $270 billion hit at the height of the retail trading frenzy in 2021, according to J.P.Morgan analysts.

Retail trading, meanwhile, accounted for 20–25% of total activity this year, touching a record high of about 35% in April, according to separate trading data from J.P.Morgan.

Individual investors snapped up high-quality stocks at discounts during selloffs, most notably after U.S. President Donald Trump's "Liberation Day" tariffs triggered a global meltdown in April, helping push the S&P 500 (.SPX) to fresh records. The benchmark index is up about 16% this year.

"Retail investors are here to stay, especially for 2026. They made money this year, they like to trade stocks, they have the applications to do so. We will continue to see them being a good presence," said Steven DeSanctis, small- and mid-cap strategist at Jefferies.

Retail participation in the stock market has grown steadily over the years as the rise of low-cost, no-commission brokerages such as Robinhood (HOOD.O) and Interactive Brokers (IBKR.O) has made it easier and cheaper for average Americans to access the market.

The trend got wider notice in 2021 as many Americans who were homebound during the COVID-19 pandemic and were flush with cash used mobile trading platforms to bet on everything from GameStop (GME.N) to Big Tech. Retail Investors to Have More Sway Over Wall Street After Record Year_1

Retail Investors to Have More Sway Over Wall Street After Record Year_1

AI plays such as Nvidia (NVDA.O) and Palantir Technologies (PLTR.O) were top favorites this year, according to retail brokerage data and executives, with the latter more than doubling in value as small-time traders bought the dip when institutional investors stepped back on valuation concerns.

Tesla shares (TSLA.O), another top retail favorite, touched a record high on December 17, their first since the end of 2024.

"The two most active stocks on our platform are typically Nvidia and Tesla. Those are just two examples of individual investors seizing the narrative and in many cases forcing institutional investors to play along," said Steve Sosnick, chief strategist at Interactive Brokers.

Quantum computing firms, uranium miners, metal miners and rare earth companies also saw substantial retail interest, as investors became more "thematic" in their approach.

RETAIL TRADERS INCREASINGLY PREFER ETFS

A key feature of retail trading in 2025 was the increasing preference for exchange-traded funds (ETFs) tracking equity indexes, cryptocurrencies and commodities, according to executives at major trading platforms.

"Investors continue to be attracted to the ETF technology. It trades throughout the day - it's tax efficient, it's transparent," said Bryon Lake, global co-head of Third-Party Wealth at Goldman Sachs Asset Management.

Direxion's Daily Semiconductor 3X Bull and 3X Bear ranked among the top five ETFs by dollar volume on eToro, said Bret Kenwell, U.S. investment analyst with the trading platform.

Retail investors are making more informed trades now as indicated by fewer and shorter so-called "meme frenzies," said Joe Mazzola, head of trading and derivatives at Charles Schwab.

"Retail has been a little bit more in tune to the market dynamics this year," he added.

POTENTIAL INTEREST RATE CUTS SEEN AS KEY CATALYSTS

Potential rate cuts by the Fed are expected to continue to boost markets next year, keeping up the retail momentum in 2026, according to analysts and brokerages.

Elevated stock market volatility may trigger dips that could also pull in individuals willing to wager on a bounce back, although recent evidence points to less enthusiasm about such opportunities than they have been in the past. Retail Investors to Have More Sway Over Wall Street After Record Year_2

Retail Investors to Have More Sway Over Wall Street After Record Year_2

Reuters last week reported that Nasdaq (NDAQ.O) is planning to submit paperwork with the U.S. Securities and Exchange Commission to roll out round-the-clock stock trading, a move analysts believe can further accelerate retail momentum.

"We're in a kind of golden age of retail investing with better access to knowledge, to the markets themselves and advanced trading platforms," said David Russell, global head of market strategy at TradeStation.

Still, with doubts continuing to linger around the AI names that have dominated the market this year, analysts said they did not expect the coming year to top 2025's record as investors may consider broadening their portfolios.

Financials, communications, discretionary, energy, miners and gold mining ETFs could do well, eToro's Kenwell said.

"But ultimately, retail loves tech so that is an area they will continue to come back to in 2026, particularly if we do see any sort of volatility."