Васисуалий Лоханкин

#LearnAndDiscuss

If monk Occam had lived to the 21st century and tried to comprehend the structure of the world economy, he would probably not only have lost his speech — he would have burned his notes and gone into digital hermitage. His famous 'razor', according to which 'entities should not be multiplied beyond necessity', would have dulled on the very first attempt to 'uncover' the structure of the global currency system. We live in a world where entities multiply — currencies, derivatives, schemes, superstructures, central banks, cryptocurrencies, ETFs. Complexity has become the new norm. But the more complex the structure, the higher the chance of its collapse.

The first weeks of 2026 seem to be entering the history books as a period when the rules of the game in the global economy were not just rewritten, but literally crossed out. What analysts call 'Spry January' has become a moment of collision between institutional war, geopolitical bluff, and radical technological nationalism. As the Trump administration moves towards active measures, we observe how the old neoliberal world gives way to the harsh mercantilism of the 21st century.

The beginning of 2026 turned out to be a time of paradoxes and resolute, sometimes bordering on adventurism, maneuvers for the American economy. While stock indices are storming historic highs, the real sector and labor market are frozen in strange anticipation, and the White House is shifting toward a model of direct state management of key markets.

After a 43-day shutdown, the US financial market finally received fresh inflation data, but the joy from the 'beautiful' figure of 2.7% is slightly overshadowed by its statistical purity. We are faced with a unique situation: the October data has simply been erased from history, and the November report, although it looks like a balm for the investor's soul, carries too much 'noise'. Nevertheless, the stock indices preferred not to dampen their spirits and seized on the positive, sending S&P 500 and Nasdaq futures into the green sector.

On December 10, 2025, the Federal Reserve once again eased monetary policy at its meeting, lowering the target range for the federal funds rate by 25 basis points to 3.50–3.75%. In its official statement, the Federal Reserve indicated that the U.S. economy continues to expand at a 'moderate pace'; however, the pace of job growth has noticeably slowed, unemployment has slightly increased, and inflation has once again been 'somewhat high' (above the target level of 2%). The regulator noted that the shift of risks towards a worsening situation in the labor market compels it to maintain a more accommodative policy. At the same time, the Federal Reserve reaffirmed its commitment to its long-term goals – maximum employment and 2% inflation – and promised to closely monitor incoming data before any additional rate adjustments.

The American economy is once again demonstrating its favorite trick — moving at two speeds simultaneously. This time, services are briskly accelerating, production is stagnating, the labor market is sending alarming signals, and investors are synchronously betting on a December easing of the Fed's policy. And all of this is happening against the backdrop of tariffs, a shutdown, and a correction in the AI sector.

If the American economy as of November 2025 were to be described by one status on social media, it would be: 'Everything is complicated'.
The Federal Reserve has published the latest 'Beige Book', and this document looks like a patient's medical chart, where seemingly nothing is critically wrong, but the overall condition is characterized by one word - weakness. Most of the twelve Federal Reserve districts report that economic activity 'has hardly changed'.

On November 21, 2025, Vice Chairman of the Federal Reserve Philip Jefferson delivered a keynote speech in Cleveland. For participants in financial markets—from stocks to cryptocurrencies—this speech is more important than it seems. The regulator has stopped viewing AI as a "futuristic toy" and has begun to consider its impact on inflation, the labor market, and, most importantly, on the financial stability of the system.

The American economy is once again demonstrating the familiar dualism of recent years: statistics confidently show growth, while consumer sentiment is plummeting. Such a gap is already a troubling indicator in itself, but at the end of 2025, it is especially contrasting.
Fresh data from the University of Michigan has cooled investors' optimism: the consumer sentiment index rose only to 51.0 points — a formal increase, but in essence, we remain at historical lows, just a few steps away from the anti-record of June 2022. The index of current conditions has plummeted by 12.8%, setting a new minimum in the entire history of observations. The main reason is a sharp deterioration in personal financial assessments and conditions for major purchases. People feel poorer again, even despite the slowdown in inflation.

The conclusion of the longest shutdown in modern U.S. history has removed one major political risk, but it has not brought the clarity to the markets that many hoped for. Formally, everything looks positive: the government is back to work, federal agencies are resuming data publications, budgets are unfrozen. But in practice, investors have not gained calmness but rather a new wave of caution — and this is due not only to the technical pause in statistics but also to the fact that markets are increasingly living in two parallel economic realities.

It has been a while, colleagues, since we focused our optics on China. Shall we take a look?
October showed that the Chinese economy has stopped responding to the usual support measures: official PMI data depicts a picture of continued decline in industry and barely alive services, while the packages of measures, although large in nominal terms, have not yet turned into tangible growth. The manufacturing index dropped to 49.0 — this is not just a number, it is the seventh consecutive month that the factory sector is reducing production and orders, while export positions are falling faster than new markets can cover. At the same time, the NBS composite (indicator of business activity in China's private sector) is holding at the boundary between stagnation and weak growth, which enhances the feeling of 'suspension' — authorities are introducing tools, but the economy remains inert.

The Federal Reserve, following the FOMC meeting on October 29, 2025, lowered the target range for federal funds by 25 basis points to 3.75–4.00%. At first glance, this appears to be a careful easing, but a deep analysis of the statement and context reveals a much richer picture: a combination of cautious policy relief, continuation of the 'combined' approach (rate + balance), and readiness to respond to risks in the dynamics of data.

#CPIWatch
Current economic signals from the USA, colleagues, seem to look contradictory: consumers are losing confidence, but businesses are demonstrating resilience, while markets continue to bet on a reduction in the Fed's rates. As a result, we get a mosaic picture where weak inflation and soft rhetoric from regulators fuel risk appetite, despite ongoing structural threats.

American stock indices continued to rise: Dow Jones Industrials added more than 500 points (+1.12%) to ~46,706, S&P 500 grew by 1.07%, Nasdaq — by 1.37%. Investors remain inspired by the successes of companies and optimistic macroeconomic signals. Notably, they highlight the statements of White House advisor Kevin Hassett that the prolonged shutdown is likely to end this week. In addition, the markets are dominated by expectations of further rate cuts by the Fed (another 25 basis points at meetings in November and December) and positive dynamics in trade negotiations between the US and China and other partners.

Next week, colleagues, promises to be hot: two powerful forces will collide in the market. On one side — great news from major companies sharing their successes, and on the other — possibly not very joyful news about the global economy slowing down.
Let's see what's happening in the States. There, despite the government being "on vacation" for a few weeks now, the main economic news keeps coming out. The most interesting thing is the inflation report. The overall numbers may rise a bit, but if the core indicator (excluding food and energy) stays the same — that will be a great sign! It will tell us that the Fed can relax for now. But the real show is the earnings season! On stage come: Tesla, Netflix, IBM, Intel, and Coca-Cola. Their results will show how big business is really feeling. But even more important will be their forecasts for the future. They can either calm everyone down or, on the contrary, ignite them, you know what I mean!

Federal Reserve Chairman Jerome Powell, in his speech on October 14, 2025, thoroughly analyzed the Central Bank's balance sheet. And it looked not like a boring accounting breakdown, but like a map of the current risks in the financial system. The Federal Reserve's balance sheet is at the center of the economic landscape: it is not just a remnant of past measures, but an active tool that is understood and desired to be used.

Federal Reserve Vice Chair Philip Jefferson presented key highlights of the updated 'Statement on Longer-Run Goals and Monetary Policy Strategy' in Helsinki and assessed the current state of the U.S. economy.
The Federal Reserve confirmed the inflation target of 2% and abandoned the introduction of a numerical employment target, emphasizing that the level is determined by a variety of factors and cannot be fixed in a single indicator. It can be said that the policy framework has retained its fundamental goals but has become more flexible.

On Friday, American indices made a noticeable rebound — the Dow gained about 0.65% — after the publication of inflation data (PCE), which generally matched forecasts and gave markets hope for further easing of monetary policy. At the same time, presidential tariff initiatives and deteriorating consumer confidence brought back elements of political risk and real economic vulnerability to the picture, so the celebration on the stock exchange had a distinct tone of caution.

The speeches of the leaders of the Federal Reserve System are closely analyzed by market participants to understand future directions of monetary policy. In this context, the recent speech by Vice Chair of the Fed Michelle Bowman is of particular interest. She outlined arguments for a significant correction of the current course: moving towards greater flexibility, focusing on forecasts, and reducing direct intervention in the markets. For investors and analysts, the key task becomes determining whether this position is a signal of real changes in Fed policy or remains just a personal opinion.

In short: Jerome Powell acknowledged that the balance of risks has shifted: risks to employment have risen, inflation has ticked up slightly again (mainly for goods), and therefore last week the Committee decided to shift policy "closer to neutral", lowering the target range for the federal funds rate by 25 bps to 4–4.25%. In his remarks, Powell emphasized the two-sided risk: too rapid easing could leave the inflation measure outside the target range, too slow could worsen labor market weakness.