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In a narrow 51-50 vote, U.S. Senate Republicans successfully blocked a resolution aimed at preventing President Donald Trump from taking further military action in Venezuela without congressional approval. The move came after intense pressure from the president on party members, with Vice President JD Vance casting the tie-breaking vote to dismiss the measure.

The vote highlights a deepening divide over presidential authority and foreign policy, even as it demonstrates Trump's significant influence over the Republican party.

GOP Blocks Resolution After Intense Lobbying

The resolution's dismissal marks a sharp reversal from just six days earlier. On January 8, the measure had advanced after five Republican senators joined Democrats in a rare rebuke of the president.

In response, Trump publicly condemned the five Republicans—Rand Paul, Susan Collins, Josh Hawley, Lisa Murkowski, and Todd Young—stating they should never be elected again. This was followed by a vigorous lobbying campaign from the administration, including calls from Trump and Secretary of State Marco Rubio, urging the senators to change their position.

The effort proved effective. On Wednesday, Hawley and Young flipped their votes, allowing Republicans to dismiss the resolution. Only three Republicans—Paul, Collins, and Murkowski—voted with the Democrats to move the measure forward.

Defining Military Action: A Central Dispute

The debate hinged on whether U.S. actions in Venezuela constituted military operations requiring congressional oversight.

Opponents of the resolution argued it was unnecessary because the U.S. has no ground troops in the country. They framed the January 3 capture of Venezuelan President Nicolas Maduro as a judicial action to face drug charges in the U.S., not a military one.

"We're not currently conducting military operations there," said Republican Senate Majority Leader John Thune, who accused Democrats of being driven by "anti-Trump hysteria."

Supporters of the resolution countered that this view ignores the reality on the ground. They pointed to the large U.S. naval flotilla blockading Venezuela, which has fired on boats for months. They also noted Trump's public threats of additional military action.

"An argument that the Venezuela campaign is not imminent hostilities within the meaning of the war powers resolution is a violation of every reasonable meaning of that term," argued Democratic Senator Tim Kaine, a key sponsor of the resolution.

Why Two Republicans Flipped Their Votes

The change in stance from Senators Hawley and Young was critical to the outcome. In a statement explaining his reversal, Young said he received assurances from senior national security officials that there are no U.S. troops in Venezuela.

He added, "I've also received a commitment that if President Trump were to determine American forces are needed in major military operations in Venezuela, the Administration will come to Congress in advance to ask for an authorization of force."

Even if the resolution had passed the Senate, it faced an uphill battle. It would have needed to clear the Republican-controlled House of Representatives and then secure two-thirds majorities in both chambers to override an expected presidential veto.

Broader Concerns Over Trump's Foreign Policy

The close vote reflects growing unease in Congress over Trump's foreign policy and the constitutional power to declare war. Lawmakers have become increasingly vocal about reasserting their authority in decisions to send U.S. troops into conflict.

This anxiety extends beyond Venezuela. Recent statements from Trump, including telling Iranian protestors that "help is on the way" and threatening military action to acquire Greenland, have fueled concerns.

After Maduro's capture, some lawmakers accused the administration of misleading them by previously insisting it had no plans to force a change of government in Venezuela. Trump has since posted a meme depicting himself as "Acting President of Venezuela" and told the New York Times that U.S. involvement there would last for years.

Silver prices edged lower, pulling back from a record high after U.S. President Donald Trump delayed imposing new tariffs on critical minerals, though he did not rule them out entirely.

The white metal was trading near $92 an ounce, retreating from its peak on Wednesday. Market anxiety over potential U.S. tariffs on silver, platinum, and palladium was temporarily calmed after a statement indicated Trump would pursue bilateral agreements to secure mineral supplies. The administration also floated the idea of import price floors, rather than simple percentage-based tariffs, to support domestic supply chains.

A More "Surgical" Approach to Tariffs

This measured strategy has eased fears of a sweeping policy that could disrupt commodity markets.

"The order suggests the administration will take a more surgical approach in making future decisions," noted Daniel Ghali, a senior commodity strategist at TD Securities. This "significantly alleviates the fear of a broad-based approach that could have inadvertently impacted the underlying bars that underscore benchmark metals prices."

The news follows a broad rally that sent silver, gold, copper, and tin to new highs on Wednesday. Investors have been piling into hard assets as a hedge against geopolitical tension, supply chain disruptions, and tariff uncertainty. Strong buying in China and the U.S., alongside a wider institutional rotation into commodities, has bolstered the entire sector.

Federal Reserve Policy Adds to Market Uncertainty

Precious metals also saw ferocious gains earlier this year, partly driven by Trump's renewed criticism of the Federal Reserve. His comments helped spark a "sell America" trade, increasing the appeal of alternative stores of value like gold and silver. On Wednesday, several Fed officials responded by stressing the importance of the central bank's independence.

Looking ahead, most Fed officials, with the exception of Stephen Miran, have signaled they are unlikely to back another interest rate cut this month. They cited a resilient economy and persistent inflation as reasons for caution. A pause in rate reductions could create headwinds for precious metals, which do not offer a yield.

Despite the Fed's current stance, traders are still pricing in one rate cut by July and a total of two by the end of the year.

Gold's Rally Has Legs, Silver's Outlook Wavers

While both gold and silver have hit major milestones, investor sentiment may be diverging.

According to the latest Markets Pulse survey, gold's rally—which was supercharged by U.S. intervention in Venezuela earlier this month—is expected to have momentum beyond January. For silver and copper, however, there are signs that investment flows are weakening as traders question the longevity of current supply constraints.

Market Snapshot

As of 8:40 a.m. in Singapore, market prices reflected the cooling sentiment:

• Gold: Down 0.2% to $4,614.18 an ounce.

• Silver: Dropped 0.6% to $92.5977 an ounce.

• Platinum and Palladium: Also declined.

• The Bloomberg Dollar Spot Index: Remained steady.

Investors in Thailand’s bond market are signaling growing unease ahead of the country's general election, pushing the yields on long-term government debt significantly higher amid concerns over post-election fiscal stimulus.

The spread between Thailand's two-year and 10-year government bond yields has widened by approximately 50 basis points over the last four months, hitting its highest level since November 2023. This steepening yield curve reflects market expectations that the incoming government will ramp up debt issuance to fund new spending programs.

While shorter-dated bonds are finding support from the prospect of interest rate cuts, demand for long-term debt is cooling, setting the stage for continued underperformance.

Election Pledges Fuel Debt Concerns

The core issue driving the market is the anticipation of substantial, debt-funded stimulus packages, regardless of which party wins the election. Higher long-term yields make it more expensive for the government to borrow, potentially limiting the fiscal space needed to support Thailand's economy.

The nation's economy is already facing multiple headwinds, including:

• The impact of US reciprocal tariffs

• Severe flooding in its southern provinces

• Border clashes with Cambodia

• A strengthening baht that hurts key export and tourism revenues

"We could see a further steepening in the Thai sovereign bond curve, especially ahead of the elections, which may spell more debt-funded fiscal stimulus," said Kobsidthi Silpachai, head of capital market research at Kasikornbank Pcl.

He predicts the yield spread, currently around 58 basis points, could widen to as much as 80 basis points leading up to the Feb. 8 election.

Analysts Warn of Downgrade Risk

The potential for unchecked government spending has raised alarms about the country's fiscal health. "If fiscal deficit spending gets out of hand, there's a rising risk of a credit rating downgrade," Kobsidthi warned, also noting the possibility of a 25-basis point rate cut in February.

This sentiment is backed by recent auction results, which show waning investor appetite for longer-dated Thai bonds.

• A sale of 2045 securities on January 7 saw a bid-to-cover ratio of just 1.67 times, below the average of previous auctions for that tenor.

• A December 24 auction for bonds due in 2077 recorded the lowest demand since 2022.

Rate Cut Hopes Anchor Short-Term Bonds

While the long end of the curve faces pressure, shorter-term debt is benefiting from different dynamics. On Tuesday, Bank of Thailand Governor Vitai Ratanakorn stated that there was room to cut interest rates further. However, he cautioned that monetary policy has limitations in addressing the country's structural economic problems.

Even without the election, investors were already preparing for increased debt issuance.

"There is scope for additional steepening" of the yield curve, said Peerampa Janjumratsang, a fixed-income portfolio manager at M&G Investments. She pointed to a significant amount of longer-dated Thai bond issuance on the horizon.

Janjumratsang also suggested the finance ministry might bring its semi-annual bond switching exercise forward to the first quarter of 2026 to extend its debt maturity profile, adding another layer of complexity for bond investors.

Wholesale inflation in Japan slowed in December, driven by a decline in fuel costs that offered some relief to businesses facing pressure from rising labor and raw material expenses.

Corporate Price Growth Eases in December

Data from the Bank of Japan (BOJ) showed the corporate goods price index (CGPI) rose 2.4% in December from the previous year. The CGPI, which measures the prices companies charge one another, matched market forecasts and marked a deceleration from the 2.7% annual increase recorded in November.

This slowdown suggests that falling crude oil prices are beginning to ease cost burdens for Japanese firms.

Weak Yen Adds Pressure to Import Prices

Despite the overall cooling trend, a weaker yen created renewed upward pressure on the cost of imported goods.

An index tracking yen-based import prices was flat in December compared to the same month a year earlier. This followed a revised 1.7% drop in November, indicating that the benefits of lower global commodity prices are being partially offset by currency movements.

BOJ to Scrutinize Data at Upcoming Meeting

These inflation figures will be a key point of analysis for the Bank of Japan at its next policy meeting, scheduled for January 22-23. The central bank is expected to incorporate this data into its quarterly review of economic growth and inflation forecasts.

Iran's Foreign Minister, Abbas Araqchi, has publicly stated that the government has "no plan" to hang people involved in widespread anti-government protests sweeping the nation. Speaking to Fox News, Araqchi was unequivocal, stating, "Hanging is out of the question."

This official denial comes as Iran confronts its largest anti-government demonstrations in years, creating a severe test for the country's clerical leadership.

Figure 1: Demonstrators fill a street in Tehran during protests driven by economic hardship and opposition to the ruling establishment.

However, the Norway-based Iran Human Rights Society reports that hangings are a common practice within Iranian prisons, casting doubt on the minister's assurances.

US Threatens Action as Tensions Rise

The situation has drawn a sharp response from Washington. U.S. President Donald Trump has been closely monitoring the unrest and initially threatened "very strong action" if Iran began executing protesters. "If they hang them, you're going to see some things," Trump told CBS News.

More recently, the U.S. President noted he was informed that the killings in the government's crackdown were decreasing and that he did not believe there was a current plan for large-scale executions.

The diplomatic pressure from Trump is part of a broader strategy that has included threats of military action. The current crisis follows a tense year in which Iran engaged in a 12-day war with U.S. ally Israel, and its nuclear facilities were bombed by the U.S. military in June.

Protests Evolve into Existential Challenge

The ongoing demonstrations represent one of the most significant challenges to clerical rule since the 1979 Islamic Revolution. What began as public outcry over severe economic hardships has transformed into defiant calls for the downfall of the entire clerical establishment.

The human cost of the crackdown has been substantial. According to the U.S.-based HRANA rights group, the verified death toll includes:

• 2,403 protesters

• 147 government-affiliated individuals

HRANA has also reported that 18,137 people have been arrested in connection with the unrest.

In response, Iran's government has blamed its economic problems on foreign sanctions and accused its international adversaries of interfering in the country's domestic affairs.

Federal Reserve officials are publicly defending the central bank's independence following a Department of Justice (DOJ) investigation into a costly building renovation and Chair Jerome Powell's congressional testimony on the matter. The subpoenas issued by the DOJ have sparked a debate over political pressure on the Fed's monetary policy decisions.

Minneapolis Fed President Neel Kashkari became the first policymaker to explicitly support Powell's assertion that the probe is a pretext to influence interest rate policy. "The escalation over the course of the past year is really about monetary policy," Kashkari stated in an interview with the New York Times.

Speaking at a Wisconsin Bankers Association event, Kashkari expressed confidence that the Fed's independence would endure, even after President Donald Trump replaces Powell, whose term as chair concludes in May. He emphasized that the Fed's decisions are made by a committee where "the best argument wins" and each member has one vote. "I feel confident that the committee will continue to make the best decisions we can, based on data and analysis," he said.

Other top Fed officials echoed this sentiment. Chicago Fed President Austan Goolsbee, Atlanta's Raphael Bostic, and New York Fed President John Williams all highlighted the critical need for the central bank to set interest rates without political interference.

"The independence of the Fed couldn't be more important for the long-run inflation rate in this country," Goolsbee commented during an NPR interview on January 14.

A Dissenting View on the Investigation

However, Fed Governor Stephen Miran, who is on unpaid leave while serving as one of President Trump's top economic advisers, offered a sharply different perspective. When asked about the DOJ probe and its potential to undermine confidence in the Fed's commitment to controlling inflation, Miran dismissed the concerns as "just noise."

"I don't really buy that. I think that inflation is very much headed in the right direction," Miran said at an event in Athens. "Inflation's on the right trajectory. It's coming down."

Miran also criticized a statement from global central bank leaders expressing "full solidarity" with Powell against the investigation. "I don't think it's appropriate for central bankers to get involved in non-monetary policy issues in their own country, and I think it's even less appropriate in other countries," he stated.

Divisions Deepen on US Economic Outlook

The same group of policymakers, with the exception of Miran, signaled they are unlikely to vote for another interest rate cut at the Fed's meeting later in January.

The Case for Holding Rates Steady

Neel Kashkari was the most direct, stating in his New York Times interview that rates should stay unchanged at the January 27-28 meeting. He pointed to a resilient economy and persistent inflation as key reasons to delay further cuts, though he noted a cut could be possible later in 2026.

After cutting rates at the final three meetings of 2025, divisions within the Fed have grown. Most market participants now do not expect another rate reduction until June.

This patient stance is shared by others. Philadelphia Fed President Anna Paulson said she was "cautiously optimistic" that inflation would approach the Fed's 2% target by the end of 2026. "If all of that happens, then some modest further adjustments to the funds rate would likely be appropriate later in the year," she told the Chamber of Commerce for Greater Philadelphia.

Raphael Bostic, speaking in Atlanta, argued that interest rates should remain at a restrictive level to combat inflation. "We haven't been to target for inflation for many, many years now. We still sit quite far from where we need to be," Bostic said.

The Push for Aggressive Cuts

In stark contrast, Stephen Miran has consistently advocated for aggressive rate cuts since his appointment in September. He reiterated his call for the central bank to lower its benchmark rate by one and a half percentage points in 2026. On January 14, he argued that the administration's deregulatory policies would likely boost economic growth without fueling price pressures, providing further justification for his position.