Trump's Oval Office Take: Iran, Ukraine, and the Fed

Henry Thompson

Political

Remarks of Officials

Economic

Central Bank

Russia-Ukraine Conflict

Middle East Situation

Summary:

Trump questioned Iran opposition viability, blamed Zelenskiy for war, and dismissed GOP Fed probe criticism, asserting loyalty.

In an exclusive Oval Office interview on Wednesday, President Donald Trump offered his perspective on several critical global and domestic issues. He questioned the viability of Iranian opposition figure Reza Pahlavi, placed blame on Ukrainian President Volodymyr Zelenskiy for the ongoing war with Russia, and dismissed Republican criticism of a Justice Department probe into Federal Reserve Chairman Jerome Powell.

President Donald Trump discusses key foreign and domestic policy issues from the Resolute Desk in the Oval Office.

Doubts Cast on Iranian Opposition Leader

While Trump has previously signaled support for protesters in Iran, where demonstrations against clerical rule have been met with a deadly crackdown, he expressed reservations about backing Reza Pahlavi, the son of the shah ousted in 1979.

"He seems very nice, but I don't know how he'd play within his own country," Trump stated. "I don't know whether or not his country would accept his leadership, and certainly if they would, that would be fine with me."

These comments expand on Trump's earlier reluctance to meet with Pahlavi. The U.S.-based Pahlavi, 65, is a prominent voice for the protests but faces a fragmented opposition movement composed of rival ideological factions with little organized presence inside Iran.

When asked about the stability of Iran's government, Trump acknowledged the possibility of its collapse but noted that "any regime can fail." He added, "Whether or not it falls or not, it's going to be an interesting period of time."

Trump: Zelenskiy Is the Obstacle to Ukraine Peace

Regarding the four-year war in Ukraine, Trump identified Ukrainian President Volodymyr Zelenskiy as the primary impediment to a peace deal. Despite his campaign promise to end the conflict in a day, the president has struggled to broker a resolution.

Trump claimed that Russian President Vladimir Putin is "ready to make a deal." When asked what was holding up negotiations, Trump's response was direct: "Zelenskiy."

"We have to get President Zelenskiy to go along with it," he added.

Defending Fed Probe and Demanding Party Loyalty

On the domestic front, Trump brushed off concerns from Senate Republicans about a Justice Department investigation into Fed Chairman Jerome Powell. Critics worry the probe interferes with the central bank's independence, but Trump was unmoved by vows from lawmakers to block his Fed nominees in protest.

"I don't care. There's nothing to say. They should be loyal," Trump said of his party's lawmakers.

He also rejected criticism from JPMorgan CEO Jamie Dimon, who warned that meddling with the Fed could lead to a spike in inflation. "I don't care what he says," Trump stated.

President Trump in a meeting at the Oval Office, where he outlined his positions on domestic and international affairs.

Venezuela, Midterms, and the Davos Agenda

The president also discussed his administration's recent actions in Venezuela. He is scheduled to meet with Venezuelan opposition leader Maria Corina Machado on Thursday, their first meeting since Trump directed the arrest of President Nicolas Maduro. "She's a very nice woman," Trump said of Machado, who won the Nobel Peace Prize last year.

He also praised Delcy Rodriguez, Venezuela's acting president, calling their conversation earlier on Wednesday "fascinating" and noting "she's been very good to deal with."

Looking ahead, Trump acknowledged the historical difficulty of midterm elections for the party in power but remained committed to the November races. "When you win the presidency, you don't win the midterms," he said. "But we're going to try very hard to win the midterms."

Throughout the 30-minute interview, Trump emphasized the strength of the U.S. economy, a message he plans to carry to the World Economic Forum in Davos, Switzerland. He intends to stress "how great our economy is, how strong our job numbers are, how good we're doing." While in Davos, he is scheduled to hold bilateral meetings with the leaders of Switzerland, Poland, and Egypt.

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Julia Daniels

Data Interpretation

Economic

Central Bank

Global banking giants are sharply divided on the Federal Reserve's next move on interest rates. While ANZ Bank anticipates a swift return to a rate-cutting cycle, J.P. Morgan argues that the central bank’s easing phase is already over.

ANZ Predicts Aggressive Fed Rate Cuts in 2026

According to Brian Martin, Head of G3 Economic Research at ANZ Bank, the Fed's current pause on rate cuts will be short-lived. Even if rates remain unchanged at the January meeting, Martin expects a pivot back to easing soon after.

ANZ projects that the Federal Open Market Committee (FOMC) could lower the federal funds target range to 3.00%–3.25% by mid-year. This forecast is built on two anticipated 25 basis point cuts, one in March and another in June.

The bank's outlook is based on the view that US inflation will gradually moderate through 2026, driven by three key factors:

• The diminishing impact of tariffs on prices.

• A slowdown in the pace of wage growth.

• A cooling trend in housing inflation.

JPMorgan's Contrarian Call: No Cuts, Hike in 2027

In a starkly different projection, J.P. Morgan’s chief US economist, Michael Feroli, believes the Fed has already completed its rate cuts.

Feroli’s team expects the central bank to maintain a stable policy throughout 2026. In a note to clients, he outlined that the next policy adjustment is more likely to be a rate hike in 2027.

This forecast follows a series of interest rate cuts in the fall and winter of 2025, which brought mortgage rates to their lowest levels in over a year.

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Risk Warnings and Disclaimers

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Gerik

Economic

Stronger-Than-Forecast Monthly Growth

Britain’s gross domestic product grew by 0.3 percent month on month in November, reversing a 0.1 percent contraction recorded in October and exceeding market expectations of a modest 0.1 percent increase. The data indicate a short-term improvement in economic momentum following a period of softness in early autumn, when uncertainty around fiscal policy weighed on activity.

This upside surprise reflects a concentration of growth drivers rather than a broad-based acceleration across all sectors, suggesting that November’s strength was partly shaped by sector-specific normalization effects.

Industrial Output Driven by Auto Sector Rebound

Nearly half of November’s GDP growth was attributable to industrial production, which rose 1.1 percent on the month. Within this category, car manufacturing played a dominant role. Vehicle output surged 25 percent after Jaguar Land Rover resumed normal operations following a cyberattack that had disrupted production at its plants and across parts of its supply chain.

This marked the largest monthly increase in UK car production since July 2020. The relationship here is largely causal, as the restoration of manufacturing capacity directly lifted output levels after a temporary shock rather than reflecting a new trend in demand.

Services Sector Adds Unexpected Support

The UK’s services sector, which accounts for the majority of economic output, also contributed positively. Services output increased by 0.3 percent in November, recovering from a 0.3 percent decline in October and outperforming expectations. This improvement points to a partial stabilization in consumer-facing and business services after earlier signs of hesitation.

However, the rebound appears corrective rather than expansionary in nature, as it followed a month of contraction and came amid lingering concerns about household spending and business confidence.

Fiscal Uncertainty Had Weighed On Activity

Earlier surveys had indicated that economic activity was faltering in the run-up to Chancellor Rachel Reeves’ annual budget statement on November 26. Speculation around potential tax increases appeared to dampen sentiment among firms and consumers alike. The November data suggest that these headwinds did not fully suppress output, though they may still be influencing underlying growth dynamics.

In this context, the November improvement can be interpreted as a temporary offset to policy-related uncertainty rather than definitive evidence of renewed economic strength.

Cautious Outlook Despite Positive Data

Despite the stronger-than-expected November figures, the Bank of England maintains a cautious view of the near-term outlook. The central bank expects the economy to show zero growth over the October-to-December 2025 period as a whole, even though it estimates underlying growth at around 0.2 percent per quarter.

This divergence highlights a distinction between short-term volatility and longer-term trend growth. November’s expansion was boosted by one-off factors, particularly in manufacturing, while the broader economy continues to face structural and cyclical constraints that limit sustained acceleration.

Source: Reuters

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Winkelmann

Political

Japan Opposition Parties CDP, Komeito To Form New 'centrist' Political Party_1

Yoshihiko Noda, leader of the main opposition Constitutional Democratic Party of Japan (CDP), speaks to members of the media, on the day of the country's upper house election, at the party's headquarters in Tokyo, Japan July 20, 2025. REUTERS/Issei Kato

Japan's main opposition Constitutional Democratic Party of Japan and Komeito have agreed to establish a new political party, their leaders said on Thursday, in an attempt to present a united front against ruling parties that they see as too right-leaning.

The announcement came a day after Prime Minister Sanae Takaichi conveyed her plans to dissolve parliament next week and call a snap election to ruling party executives. If realised, the general election could be held as early as Feb. 8.

"The Takaichi administration was formed after last year's leadership race, and policies have generally leaned to the right," CDP leader Yoshihiko Noda told reporters. "This is an opportunity to place the centrist camp right at the heart of politics."

Komeito ended its 26-year partnership with Takaichi's Liberal Democratic Party (LDP) last October over what it viewed as the LDP's failure to respond to a political funding scandal.

The LDP subsequently formed a coalition government with the right-leaning Japan Innovation Party, known as Ishin, paving the way for Takaichi to become the country's first female prime minister.

Komeito chief Tetsuo Saito said the new party would initially be led jointly by Noda and himself.

Source: Reuters

Risk Warnings and Disclaimers

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King Ten

Political

Remarks of Officials

Economic

Middle East Situation

Daily News

President Donald Trump has signaled a shift to a more cautious "wait-and-see" stance on Iran, stating he believes the violent crackdown on protesters is subsiding and that there is no current plan for large-scale executions. The comments mark a de-escalation after earlier threats of U.S. intervention.

This development follows reports from Iranian state media that a 26-year-old man arrested during protests will not face the death penalty, contradicting earlier claims by a human rights group.

Key takeaways from the situation include:

• Trump believes there is no immediate plan for mass executions in Iran.

• Iranian state media has denied a death sentence for a 26-year-old protester.

• The possibility of U.S. military action has not been completely ruled out.

• Trump expressed doubt about opposition figure Reza Pahlavi's ability to lead.

This screengrab from Iranian state media shows burnt vehicles in Tehran, evidence of the intense unrest that has gripped the country.

Military Tensions and Market Reactions

Fears of a U.S. strike in the Middle East had been growing after Trump repeatedly threatened to intervene on behalf of Iranian protesters. On Wednesday, Iran warned its neighbors that it would target American bases in the region if the U.S. launched attacks. A U.S. official also confirmed that some American personnel were being withdrawn from regional bases, and Qatar acknowledged drawdowns from Al Udeid air base, the largest U.S. facility in the region, citing "current regional tensions."

Trump's subsequent remarks on Wednesday, however, helped calm the markets. Oil prices retreated from multi-month highs, and gold eased from a record peak on Thursday. While the president did not entirely rule out future military action, his tone suggested a move away from imminent conflict. "We are going to watch what the process is," he said, noting his administration had received a "very good statement" from Iran.

Last year, Iran launched missiles at Al Udeid in response to U.S. airstrikes on its nuclear installations during a 12-day war with Israel.

Protests Subside Amid Heavy Crackdown

The recent unrest, which began over soaring prices, has presented one of the most significant challenges to Iran's clerical establishment since the 1979 Islamic Revolution. The crackdown has been severe, with reports indicating more than 2,500 people have been killed—a figure that far exceeds the death tolls from previous protests, including the 2022 "Woman, Life, Freedom" movement and the 2009 election unrest.

Sources inside Iran contacted by Reuters said the protests appeared to have died down since Monday, although an internet blackout has made information difficult to obtain.

Speaking at the White House, Trump claimed to have received information from "very important sources on the other side" that the killings were subsiding. Echoing this, Iranian Foreign Minister Abbas Araqchi told Fox News on Wednesday that "there is no plan for hanging at all," calling such a possibility "out of the question."

The Case of Essam Soltani

Adding to this narrative, Iranian state media reported Thursday on the case of 26-year-old Essam Soltani, who was arrested during protests in the city of Karaj. While a rights organization, Hengaw, had previously stated he was scheduled for execution, state media clarified that the death penalty does not apply to the charges he faces—"colluding against the country's internal security and propaganda activities against the regime"—even if a court confirms them.

Iranian authorities have framed the demonstrations as legitimate economic grievances co-opted by foreign enemies and "terrorists" who attacked security forces and public property.

Trump Questions Opposition Leadership

During the unrest, Reza Pahlavi, the U.S.-based son of Iran's last Shah, has emerged as a prominent voice in the fragmented opposition. In an exclusive interview with Reuters, Trump offered a mixed assessment of the 65-year-old, who has lived outside Iran since before his father was overthrown in 1979.

"He seems very nice, but I don't know how he'd play within his own country," Trump said. "I don't know whether or not his country would accept his leadership, and certainly if they would, that would be fine with me."

When asked about the possibility of the government in Tehran falling due to the protests, Trump acknowledged that "any regime can fail." He concluded, "Whether or not it falls or not, it's going to be an interesting period of time."

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Gerik

Economic

A Broad-Based Visa Freeze Anchored In Welfare Concerns

The US State Department announced that it will pause the issuance of new immigrant visas for citizens of 75 countries, arguing that immigrants from these nations rely on public assistance at what it described as unacceptable rates. The freeze, which takes effect on January 21, represents one of the most expansive nationality-based immigration restrictions in recent years, both in scale and geographic scope.

According to official statements released on social media and later published on the State Department’s website, the policy is designed to prevent future immigrants from becoming a public charge. The administration framed the move as a fiscal safeguard, asserting that the United States must ensure new immigrants do not extract wealth from American taxpayers through welfare programs.

Global Reach Reflects A Systemic Policy Shift

The affected countries span every major region, including the Americas, Europe, Asia-Pacific, and Africa. The list includes US allies, geopolitical rivals, and several nations that are also popular travel destinations for American tourists. This wide coverage suggests that the policy is not narrowly targeted at security threats or diplomatic adversaries, but instead reflects a systemic redefinition of immigration eligibility based on projected economic outcomes.

By focusing on anticipated welfare usage rather than individual circumstances, the policy links national origin with aggregate fiscal risk. The relationship implied here is correlational rather than case-specific, as the assessment relies on statistical patterns attributed to countries rather than individualized determinations of an applicant’s financial capacity.

What The Freeze Does And Does Not Affect

The suspension applies only to new immigrant visas, meaning it does not impact tourist visas, temporary travel, or visas that have already been granted. Individuals who currently hold immigrant visas are not affected. However, senior immigration officials have indicated that previously issued visas, particularly those granted during the prior administration, are under review.

Joseph Edlow, director of US Citizenship and Immigration Services, stated that a comprehensive reassessment of green cards issued to nationals from countries of concern is underway. This review has been positioned as a corrective measure aimed at reversing what the administration characterizes as overly permissive resettlement policies in recent years.

Policy Rationale And Economic Framing

The administration’s justification rests on the premise that immigration should be conditioned on economic self-sufficiency. By prioritizing fiscal considerations, the policy aligns immigration control more closely with domestic budgetary discipline. The stated goal is to ensure that future immigrants contribute economically rather than rely on social safety nets.

This framing establishes a direct causal link in policy logic between immigration intake and long-term public spending. However, it also raises questions about the complexity of labor market integration, wage trajectories, and the broader economic contributions of immigrants over time, which are not explicitly addressed in the policy announcement.

Implications For Immigration And Foreign Relations

The decision is likely to have wide-ranging implications beyond immigration flows alone. For affected countries, the freeze may strain diplomatic relations, particularly where long-standing partnerships exist. Domestically, it signals a continued shift toward restrictive, economically conditioned immigration criteria that favor upfront assessments of fiscal impact.

By embedding welfare risk into visa eligibility at the national level, the US is redefining how immigration policy intersects with social policy. Whether this approach effectively reduces public expenditure or instead reshapes migration patterns in less predictable ways will depend on how the policy is implemented, reviewed, and potentially expanded in the months ahead.

Source: CNBC

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Alexander

Remarks of Officials

Economic

Bond

Central Bank

China's central bank is cutting interest rates on its structural monetary policy tools by 0.25 percentage points, a targeted move designed to support the economy as it moves into 2026.

A Closer Look at the New Lending Rates

Deputy Governor Zou Lan announced in a Beijing briefing on Thursday that the one-year rate for various relending facilities will fall from 1.5% to 1.25%. These instruments are designed to encourage commercial banks to extend credit to specific sectors of the economy.

The People's Bank of China (PBOC) will also roll out two other key initiatives:

• A new, dedicated relending program for private companies.

• Increased lending quotas for technology innovation loans.

Policy Context and Future Rate Path

These adjustments signal a commitment to targeted easing as China's economy navigates weak demand and persistent imbalances. The move follows a year of limited action. In 2025, the PBOC only reduced its main policy interest rate once by 10 basis points, far less than the 40 to 60 basis points of easing many analysts had anticipated.

Looking ahead, Zou noted that improved interest margins at commercial banks have created room for a potential reduction in the main policy rate, although he did not provide a specific timeline.

Additional Liquidity and Open Market Operations

To further bolster credit availability, the PBOC will merge and expand existing facilities, providing an extra 500 billion yuan for lending to small businesses and the agricultural sector.

Zou added that the central bank also intends to gradually increase its trading of government bonds through open market operations. This strategy aims to ensure the financial system maintains ample liquidity.

According to Zou, the monetary authority will release detailed documents outlining the implementation of these new policies shortly.

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