As this weekend approaches, several unexpected events have occurred.
The US dollar unexpectedly surged;
The US military unexpectedly launched airstrikes;
Trump's choice for the Federal Reserve chair has changed;
Japan raised interest rates, but it might be a 'fake rate hike'?
……
Trump: Initiating retaliation
In a certain sense, the US has simultaneously launched two waves of retaliatory wars, both militarily and financially.
Trump posted on social media, stating that he has initiated retaliatory actions against the Islamic State extremist group, with the US military launching airstrikes and carrying out intense attacks on Islamic State targets within Syria.
This action is a retaliation for the attack by the Islamic State a few days ago, which resulted in casualties among several Americans. In the incident on December 13, two U.S. soldiers were killed, three were injured, and one American civilian was killed.
Therefore, the recent U.S. military airstrike operation received the consent of the Syrian interim government.
Trump may also hope to demonstrate through this action that although the U.S. military is reducing its military presence in the Middle East, it still possesses the strength to say, 'I call the shots' in this region.
U.S. stocks surged.
The sudden military actions by the U.S. military did not affect the performance of the U.S. stock market, and even Japan's interest rate hike did not cause a shock in the U.S. stock market.
This week, the three major U.S. stock indices ended Friday's trading session with synchronous gains, with the Nasdaq index rising by 1.31%, and the S&P 500 index also seeing an increase of 0.88%.
Meanwhile, the performance of Chinese concept stocks in the U.S. has also been good, with the China Golden Dragon Index rising by 0.86%.
Previously, the market was concerned that Japan's interest rate hike would lead to the unwinding of carry trades, triggering large-scale sell-offs of dollar assets, but that does not seem to have occurred.
In addition, European stock markets also saw varying degrees of increase, while gold and oil slightly rose.
But what is most concerning is that the dollar has also experienced a significant increase.
The dollar surged, leaving the yen stunned.
This Friday, the Bank of Japan decided to raise rates again by 0.25%, bringing Japan's policy rate up to 0.75%, the highest level since the end of 1995.
In the past 30 years, Japan has mostly maintained zero or even negative interest rates; now, after 44 months of inflation exceeding 2%, the Bank of Japan has finally raised interest rates to their highest level in 30 years.
Due to the recent decision by the Federal Reserve to cut interest rates, the interest rate differential between the yen and the dollar has decreased by 50 basis points just in December.
Under normal circumstances, this helps the yen exchange rate rebound and would lower the dollar's exchange rate.
But unexpectedly, the opposite occurred; the yen suddenly plummeted, falling from 155 to around 158.
On the contrary, the dollar rose and launched a brilliant counterattack against the yen.
This move is also a declaration from the dollar interest group to Japan that the dollar still has strong dominance.
The Federal Reserve will face its biggest change in 8 years.
However, the real trouble for the Dollar Financial Group comes from within the United States, from the upper echelons of the White House.
It was Trump who personally put Powell on the throne of the current Federal Reserve Chair. But now Trump wants to unseat Powell and support another candidate to replace Powell as the next Federal Reserve Chair.
Currently, Bessent and Trump are intensively interviewing, with reports that the candidates have been narrowed down to the final four.
One of Trump's main criteria is that the next Federal Reserve Chair must align with him on interest rate decisions.
Previously, Hassert has repeatedly expressed signals hoping for an interest rate cut from the Federal Reserve, thus winning Trump's favor.
And now, after discussions with Trump, Federal Reserve Governor Waller has also gained Trump's appreciation.
Waller stated a few days ago that U.S. interest rates should decrease by 50 to 100 basis points from the current benchmark.
Trump stated that he would make a final decision in the coming weeks, meaning that in 2026, the Federal Reserve will undergo its biggest change in 8 years, not only changing the Federal Reserve Chair but perhaps also seeing significant changes in the Federal Reserve's monetary policy.