On China:
- Trump and China's Xi were able to discuss big picture issues
- Mood in room between Xi and Trump was one of great respect
- Trump agreed to cut fentanyl tariff on China in half
- China committed to reducing precursor flow on fentanyl
- US will suspend entity list restrictions for US technology exports for one year
- Section 301 measures targeting China's maritime logistics and shipbuilding also suspended for one year
- Suspension of commerce entity list rule was agreed in exchange for China's rare earths pause
- We finalised TikTok transfer agreement in Malaysia; will move forward in coming weeks
- US is behind China on nuclear power but will catch up
- China will be doing massive amount of farm purchases
- China deal signatures will be possibly next week
There's nothing new here as we got lots of previews from Bessent and Trump before the actual Trump-Xi meeting. If you've been wondering why the markets didn't react to the positive Trump's remarks, it's because everything was already priced in before the actual event.
On Japan:
- Over time Japan will wean itself off of Russian energy
- Trump had great personal chemistry with Japan's new Prime Minister
On Fed chair interviews:
- Doing second round of Fed chair interviews
- Will present set of candidates early December
- Hope to have a candidate by Christmas
The finalists include Waller, Bowman, Hassett, Warsh and Rieder
On economy:
- Applaud Fed rate cut but language shows they are stuck in the past; models broken
- Very optimistic for 2026 for growth and inflation levels
- Job growth will rebound very strongly
- I think we're going to have parallel prosperity next year on main street, wall street
If job growth rebounds very strongly, then the Fed is likely to turn more hawkish. The market is pricing 85 bps of easing by the end of 2026 (vs 50 bps expected by the Fed).
