Morgan Stanley's Optimism for Trump, IMF Support for Egypt, and Recent Developments in East Asian Economies: What's Happening in Global Markets?
Economic developments in the US and Asia are drawing attention. Morgan Stanley (MS) CEO has presented positive expectations regarding the potential return of the Trump administration, while the central banks of China and Japan are carefully reviewing their interest rate policies. The increased optimism among small businesses after the elections also reflects confidence in the US economy.
Morgan Stanley's CEO is optimistic about the US economy prior to Trump's return Morgan Stanley CEO Ted Pick stated in an interview with Nikkei that there is "good reason to be optimistic" about the US economy for the coming year. Pick attributed this optimism to the possibility of relaxed regulations under Donald Trump's "growth-friendly" administration. This statement reflects expectations that the economy could revive under Trump's leadership.
Small businesses have increased their optimism after the elections A survey conducted in the US indicates that small business owners are more optimistic about the economy following the elections. The National Federation of Independent Business's Small Business Optimism Index rose by 8 points to 101.7 in November, marking its highest value since June 2021. The Uncertainty Index, which hit a record high of 110 in October, dropped by 12 points to 98 in November.
NFIB Chief Economist Bill Dunkelberg explained that small business owners have become more certain about future business conditions following the presidential elections, breaking a nearly three-year record of uncertainty. This increase in business optimism demonstrates the direct impact of election outcomes on economic expectations.
China's central bank keeps interest rates unchanged in mid-term lending operation The People's Bank of China (PBOC) did not change interest rates in its mid-term lending operation held on Wednesday. The bank extended a one-year mid-term lending facility (MLF) loan worth 300 billion yuan (approximately $41.10 billion) at an interest rate of 2.00%. The central bank noted that the offered rates ranged from 1.90% to 2.30%.
Additionally, MLF loans valued at 1.45 trillion yuan were set to mature this month. This decision suggests that the PBOC prefers to maintain its strategy of ensuring economic stability while also aiming to balance economic growth by keeping interest rates steady.
Japan prepares a record budget, expecting a rise in interest rates The Japanese government is preparing a record general account budget exceeding 115 trillion yen (approximately $732 billion) for the fiscal year starting in April. Public broadcaster NHK reported that this marks the third consecutive year that the budget has surpassed 110 trillion yen and reached a record level. The government seeks this budget with the support of the Bank of Japan, which is moving away from its decade-long stimulus program.
The Ministry of Finance announced that the interest rate is expected to rise from 1.9% to 2.1%, indicating an increase in debt service costs. This development shows that the Japanese government will create a budget that supports economic growth but is more costly. The record budget is considered to be an important tool in achieving the country's economic goals.
BOJ Governor Ueda is optimistic about Japan's inflation target Bank of Japan (BOJ) Governor Kazuo Ueda announced that the country's economy is closer to sustainably reaching the 2% inflation target next year. Ueda mentioned that signs of improvement in consumption are emerging due to labor shortages pushing wages higher. These developments indicate that Japan is making progress in achieving its goals after years of aggressive monetary stimulus.
Ueda highlighted the high uncertainties in overseas economies, emphasizing the need to examine the effects of new economic policies that include the US. He stated that the degree and pace of monetary expansion would depend on developments in economic activity, prices, and financial conditions. Japan may be on the verge of achieving sustained success in its inflation target.
Bank of Korea plans to lower interest rates The Bank of Korea plans to lower interest rates next year to combat increasing political uncertainties and downward economic risks. The bank's monetary policy report for 2025 indicated that the bank anticipates reducing the base interest rate in line with economic conditions that will ensure stable inflation and alleviate pressures on growth.
The bank aims to make interest rate cuts in parallel with changes in economic conditions while paying attention to risks to financial stability. This strategy can be viewed as a step to mitigate downward pressures in the economy.
IMF to provide $1.2 billion loan to Egypt The International Monetary Fund (IMF) announced that an agreement at the staff level was reached regarding the fourth review under the Extended Fund Facility arrangement with Egypt. The IMF stated that Egypt could access approximately $1.2 billion in funding, subject to the approval of the board.
This loan agreement aims to support Egypt's efforts towards economic reforms and financial stability. The IMF's support will provide significant resources for the country in improving its economic balances and maintaining its growth objectives.