by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with an analysis of how the US, in its effort to maintain global influence, continues to pressure China’s allies. We then share our insights on the latest FOMC meeting and its potential implications for monetary policy. Next, we discuss the renewed emphasis on strong-dollar policy, recent reports of White House officials engaging with Canadian separatists, and Germany’s attempts to strengthen its energy infrastructure for wartime preparedness. We also include a roundup of economic data from the US and international markets.

US Interventionism: Tensions between the US and Iran intensified on Wednesday after President Trump warned that “time is running out” for an agreement. The president declared that he was sending a naval armada to the region to pressure Iranian leaders into returning to the negotiating table and accepting limits on their nuclear program. This escalation reflects the administration’s increasingly interventionist foreign policy, which seeks to undermine China by exerting pressure on its allies.

• Although the president has not detailed the terms of his desired deal, the US has presented Iran with three core demands for negotiations: a permanent halt to uranium enrichment and the disposal of its current stockpile; strict limits on the range and number of its ballistic missiles; and an end to all support for proxy groups in the Middle East, including the Houthis, Hezbollah, and Hamas.
• At present, there is no indication that Iranian leadership is ready to accept these terms. A primary obstacle remains Tehran’s refusal to dismantle its uranium enrichment program, which it maintains is for civilian use. In direct response to President Trump’s “armada” warning, Iranian Foreign Minister Abbas Araghchi stated on Wednesday that, while Iran remains open to a “fair and equitable” nuclear deal, its armed forces are prepared with “fingers on the trigger.”
• The White House is increasingly drawing on a “Venezuelan blueprint” to counter Chinese influence on its closest allies. Although the United States has already removed Maduro from power, it has warned that further action remains on the table if Caracas continues to defy Washington. At the same time, the administration appears to be pursuing a less militant but still high-pressure approach toward Cuba, restricting access to much-needed oil in an effort to force Havana back to the negotiating table with the US.
• While the US’s more interventionist foreign policies have shown some success in Iran and South America, their potential effectiveness against North Korea remains an open question. Pyongyang stands apart as the one adversary with a proven capacity to retaliate directly against a US attack. Notably, as Washington has ramped up pressure on Venezuela and Iran, there have been signs that Kim Jong Un has redoubled his efforts to build a credible nuclear deterrent.
• The recent pivot in US foreign policy, prioritizing military leverage alongside traditional diplomacy, is expected to provide sustained tailwinds for domestic defense contractors throughout the year. Consequently, allocating capital to defense equities, complemented by strategic positions in precious metals, offers investors a dual hedge against the financial volatility stemming from escalating geopolitical tensions and a fragmenting global order.

 FOMC Pause: The Federal Reserve left its benchmark interest rate unchanged at 3.5–3.75% following its two‑day policy meeting. The decision seems to signal a clear improvement in overall economic conditions, a trend that policymakers expect to continue through at least the first half of the year as new tax cuts take effect. While markets likely viewed the move as a show of confidence, we believe the Fed is also creating space for the incoming chair to set policy according to his own view of the economy.

• The Fed statement showed several notable changes from the previous release. The language now characterizes economic activity as growing at a solid rather than a moderate pace, job gains were described as low rather than having slowed, and the unemployment rate appeared to be stabilizing while inflation remained elevated but not rising. The committee also removed references to downside risks to both inflation and employment outcomes.

• While the statement reflected a more positive outlook, they also suggested that the Fed does not feel compelled to adjust policy at this time. In the press conference, Chair Powell noted broad support for holding rate steady, despite two dissents on the committee. He also did not indicate any concern that current labor market conditions or inflation required additional policy action.
• The neutral tone of the Fed statement and the press conference suggests a committee comfortable maintaining the status quo through the next several meetings. This “steady-hand” approach appears strategic. By holding rates firm, Chair Powell provides his eventual successor, set to take over this summer, the maximum possible flexibility to steer monetary policy. This transition period will allow the incoming chair a clean slate to implement their own vision without being immediately boxed in by inherited momentum.
• Consequently, we anticipate that the Federal Reserve will maintain current interest rates until a new chair takes over. This period of stability should bolster the US dollar, as sustained yield differentials continue to attract foreign capital. Furthermore, this “higher-for-longer” environment is likely to drive a flight to quality, with investors favoring large-cap, established corporations with proven track records of navigating volatility and strong earnings.

Strong-Dollar Policy: Treasury Secretary Scott Bessent dismissed speculation that the US plans to intervene in currency markets to support the yen, saying such action is “not under consideration.” His comments followed a New York Fed “rate check,” a move often seen as a precursor to formal intervention, which had fueled market rumors. Following his remarks, the dollar strengthened while the yen retreated. The episode comes as Japan adopts a strategy of tactical silence in its efforts to stabilize its currency.

 Canada Separatists: White House officials have reportedly met with members of the Canadian separatist movement as tensions between the United States and China continue to rise. The Alberta Prosperity Party, which advocates for the province’s independence, has held three meetings with US officials since April and is seeking a $500 billion credit swap line should a future referendum succeed — though none has yet been scheduled. The White House maintains that no formal cooperation exists.

 Defense Spending Spillover: Germany is exploring ways to utilize its defense budget to bolster energy infrastructure. By leveraging a defense-related debt brake exemption, the government aims to establish a $2.4 billion resilience fund designed to “war-proof” the national energy grid. This initiative highlights how the current European defense buildup is generating significant spillover effects, driving investment into adjacent industrial sectors like energy and civil protection.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with an analysis of why the US dollar continues its slide against major global currencies. We then provide a briefing on the leading contenders to head the Federal Reserve as the transition from Chair Powell nears. From there, we pivot to the surge in silver prices across Chinese markets, growing apprehension among Middle Eastern nations regarding potential US strikes on Iran, and North Korea’s latest efforts to bolster its nuclear deterrent. We also include a roundup of economic data from the US and international markets.

Dollar Drop Continues: The US dollar slid against major currencies amid growing concerns that the White House may not be fully committed to a strong-dollar policy. On Wednesday, the greenback fell to its lowest level since 2022, extending a four-day decline. The sell-off accelerated following comments from the president that he was unconcerned by the currency’s recent weakness. This shift in tone has fueled speculation that the administration may be tolerating, or even encouraging, a weaker dollar as it looks to protect the US bond market.

• The US dollar’s decline appears to have been driven by potential currency intervention from the New York Federal Reserve. On Friday, officials reportedly conducted a “rate check,” surveying the market to gauge liquidity and pricing for a potential intervention. This move follows rising speculation that the US might coordinate currency actions with Japan for the first time in 15 years.
• Rising Japanese bond yields and a weakening yen are creating a potential ripple effect for the US financial system. Speculation is mounting that Japanese pension funds and financial institutions may begin repatriating capital by offloading foreign bond holdings in favor of domestic assets. This large-scale reallocation would likely put upward pressure on US Treasury yields, prompting the US to seek alternative policy remedies to maintain market stability.
• The US support for intervention likely reflects the White House’s growing anxiety regarding long-term Treasury yields. Since taking office, the current administration has signaled its desire for lower rates, as they serve as the primary benchmark for domestic lending. Consequently, the prospect of Japan, the world’s largest foreign holder of US Treasurys, liquidating holdings to fund yen stabilization presents a systemic risk.
• While recent White House comments have been interpreted as a departure from the “Strong Dollar” policy, they actually signal a strategic move toward selective intervention. Its readiness to intervene, including adding potential support for the yen, proves that it is following a pragmatic, outcome-oriented approach. The key insight is that the administration now ranks Treasury yields above dollar dominance, which is why it is not concerned about the dollar’s decline.
• The administration’s apparent preference for a weaker dollar reinforces our conviction in broad portfolio diversification. While precious metals such as gold and silver have rallied significantly over the past few months, they continue to offer essential protection against currency debasement. Furthermore, we see a compelling case for increasing international equity exposure. A softer dollar has historically acted as a tailwind for foreign markets and has enhanced total returns for US-based investors.

New Fed Frontrunner: The race for the next Federal Reserve chair has been upended, with BlackRock’s Rick Rieder now the clear market favorite. Prediction markets like Polymarket now price Rieder’s probability near 50%, a surge propelled by endorsements from former frontrunner Kevin Hassett and the apparent favor of the president. With a final decision imminent, Rieder’s reputation as a pragmatic “bond king” is triumphing over the academic pedigrees of more traditional candidates.

• The momentum behind Rieder’s candidacy stems directly from the president’s deep-seated desire to reform the Federal Reserve. The president has persistently argued that the central bank lacks credibility due to perceived failures in fulfilling its dual mandate. To realign its priorities, he has championed a doctrine of closer policy coordination with the executive branch, with the overarching aim of prioritizing lower interest rates to drive economic expansion.
• The president’s search for a new Fed chair highlights the difficult balance between appointing a trusted agent of his agenda and a candidate deemed credible by the markets. For instance, the White House backed away from Kevin Hassett amid tepid Wall Street support and Senate confirmation risks. Concurrently, former Fed Governor Kevin Warsh’s prospects have faded as his history of hawkish policy positions undermines the credibility of any shift toward the president’s growth-focused, dovish priorities.
• While current Fed Governor Christopher Waller is still a leading contender for chair, his staunch loyalty to Fed orthodoxy may be his biggest liability. Waller has demonstrated intellectual independence following his advocacy of using JOLTS to guide rate decisions, which has paved the way for more accommodative policy. However, his refusal to join fellow governor and current CEA Chair Stephen Miran in pushing aggressive cuts may have signaled to the White House that he is too loyal to the “Fed system.”
• As a relative unknown, Rick Rieder’s lack of a defined policy record may be his greatest asset, making him difficult to pigeonhole. In a recent interview, he aligned himself with the current FOMC consensus, signaling support for two rate cuts this year. However, he also introduced a distinct policy nuance, arguing the Fed should take more active measures to support the housing market, which he views as a key constraint on affordability.

Silver Boom: A Chinese silver fund has suspended trading after its share premium soared beyond the value of its underlying assets. This halt coincides with a domestic frenzy for the metal, fueled by rising global prices and exacerbated by Chinese export restrictions that have pushed local prices above the global average. While the frenzy signals acute market stress, it does not yet point to broader systemic risk.

Gulf Allies Resist: Saudi Arabia has declined a US request to utilize its airspace for potential military action against Iran. The decision aligns with a similar recent refusal from the United Arab Emirates, underscoring a collective regional reluctance to support an offensive operation. This reluctance stems from profound concerns about the regional fallout of a destabilized Iran and from a clear desire to avoid being implicated in a strike, which substantially hinders US planning for military intervention.

North Korean Deterrent: North Korea has signaled its intent to expand its nuclear arsenal, a move widely interpreted as a defensive posture against potential US intervention. Following the removal of Maduro in Venezuela, Kim Jong Un appears to be prioritizing deterrence to secure his leadership. The escalation highlights a deepening deficit of trust, which could lead to a further destabilization of the global landscape.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with a renewed threat of US tariff hikes against South Korea, illustrating how global trade tensions could rekindle at any time. We next review several other international and US developments with the potential to affect the financial markets today, including a new free-trade deal between the European Union and India and a US decision to limit Medicare payments to health insurers — a move that has put intense downward pressure on health insurance stocks.

United States-South Korea: President Trump late yesterday said he will hike the US tariff on South Korea’s imports to 25% to punish the country for its slow approval of the bilateral trade deal reached by Washington and Seoul last year. The tariff hike would apply to all goods covered by Trump’s reciprocal tariffs, along with cars, lumber and pharmaceutical goods. As with the president’s weekend threat to impose new tariffs against Canada, the development shows that trade tensions remain a potential threat to financial markets.

United States-Iran: Reports yesterday said the USS Gerald R. Ford aircraft carrier and her strike group have arrived in the Middle East, greatly enhancing the US military presence in the region if President Trump wants to launch his threatened attack on Iran to retaliate for its brutal crackdown on protestors. There is no certainty that such an attack will happen, but investors should be aware that it remains possible. If it happens, there is some risk that it could spark a regional war that would disrupt the global economy and financial markets.

European Union-India: Officials from the EU and India today signed a free-trade deal that is expected to cut or remove tariffs on more than 96% of EU exports to India, including machinery, autos, and alcohol. However, sensitive agricultural exports on each side won’t be affected. For EU exporters, the deal is expected to yield savings of about 4 billion EUR ($4.8 billion). The deal is also expected to help boost EU exports to India, helping Brussels diversify its foreign sales away from the US as the trans-Atlantic relationship sours.

Canada-China: Top Chinese mining company Zijin Mining Group yesterday announced that it is buying Canadian miner Allied Gold in an all-cash deal valued at about $4 billion. The deal, which still requires shareholder and regulatory approval, illustrates how Prime Minister Carney has quickly moved to boost ties with China as a counterweight to the increasingly fraught relationship between the US and Canada. Of course, such deals probably raise the chance that the Trump administration will impose new tariffs or trade barriers on Canada in retaliation.

United Kingdom-China: The British government is reportedly planning to place tighter curbs on Chinese agencies and companies operating in the UK. The enhanced scrutiny will likely focus on China’s Ministry of State Security, the Chinese Communist Party, and state-owned Chinese firms operating or investing in sensitive sectors. The move comes despite UK Prime Minister Starmer’s effort to improve relations with China in order to diversify British trade away from the US, illustrating the risks inherent as countries embark on that strategy.

United Kingdom: As top Conservative Party politicians continue to defect to the right-wing populist Reform UK Party, pulling the Conservative Party to the right, several moderate Conservative officials yesterday launched a new centrist movement called Prosper UK to drag the Conservatives back toward the centrists. The officials said Prosper UK is also designed to counter the way the Labour Party has been pulled to the left. The development is further evidence that the British political system is fracturing, which will likely paralyze policy going forward.

US Monetary Policy: The Fed’s policy committee begins its latest conclave today, with its decision expected tomorrow at 2:00 PM ET. Based on interest-rate futures trading, investors are almost unanimous in expecting the officials to hold their benchmark fed funds rate unchanged at 3.50% to 3.75%, after cutting rates at each of the previous three meetings. We expect that the officials will resume cutting rates at some point this year, but we continue to think that the bulk of any further cuts will be backloaded in the second half of the year.

US Health Insurance Industry: The administration yesterday said it would hike Medicare reimbursements to health insurers by a paltry 0.09% in 2027, versus their 5.0% increase in 2026. In response, health insurance giants UnitedHealthcare and Humana both saw their share prices fall by at least 10%. CVS and Elevance saw their share prices drop by more than 5%. The news illustrates how any firm that relies on federal reimbursement or fees, including defense contractors, is now at risk as the administration refocuses on cutting government spending.

US Airline Industry: Today marks the beginning of a new era as Southwest Airlines finally abandons open seating for assigned seating. For Southwest customers who love the airline’s extensive flight network (like yours truly), the move will put an end to the “seating roulette” that most travelers endured until now.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with notes on the new record price for gold above $5,000 per ounce and a related drop in the value of the dollar today. We next review several other international and US developments with the potential to affect the financial markets today, including an additional purge of a high-level Chinese general and the unexpected risk of another, partial government shutdown in the US.

Global Gold Market: Gold prices today have surged above the $5,000-per-ounce mark for the first time, and the metal is changing hands at $5,084 per ounce at this writing. In our view, the current upward pressure on gold prices reflects a range of factors, from concerns about currency debasement to geopolitical tensions and uncertainty about the future of US economic and international policy. Because of those factors, we continue to hold gold in all five of our Asset Allocation strategies and in our Global Hard Assets portfolio.

Global Currency Market: In another major market disruption today, the US dollar has slumped approximately 0.4%, as measured by the US Dollar Index. That means the greenback has now depreciated by about 2.1% just over the last week. Much of the downward pressure today comes from speculation that the Japanese government will intervene in the currency markets to prop up the yen. As we have noted in the past, a falling dollar tends to be bullish for foreign stocks.

United States-Canada-China: In a Saturday social media post, President Trump said he would impose a new 100% tariff on imports from Canada if Ottawa strikes a trade deal with Beijing. The move follows Canadian Prime Minister Carney’s recent trip to China, where he and General Secretary Xi agreed to cut their trade barriers on electric vehicles and canola oil — a move seemingly at odds with Carney’s historic speech in Davos, where he said “middle powers” like Canada must stick together instead of making deals with the Great Powers.

• Coupled with the president’s threat to hit eight European countries with tariffs because of their resistance to his desire for the US to take over Greenland, the new threat against Canada is a reminder that the administration could return to its aggressive trade policies at any time.
• That’s likely to further raise concerns among foreigners about the wisdom of investing in US assets or holding the dollar. If so, it could lead to further capital flight from the US, weighing on stock and bond values, pushing up interest rates, and reducing the value of the dollar. That scenario would also put added upward pressure on the prices for foreign stocks and precious metals.

Chinese Military: The People’s Liberation Army announced on Saturday that Zhang Youxia, vice chairman of the Central Military Commission, is under investigation for “serious discipline violations,” along with another top general. That suggests General Secretary Xi is continuing to press his long campaign to uproot deep-seated corruption in the armed forces. It also suggests Xi may have trouble trusting his military leaders’ advice and willingness to carry out orders — a concern that would likely impede any effort by Xi to take control of Taiwan.

• According to press reports, government officials said in a confidential briefing over the weekend that Zhang was being probed not only for political reasons and graft, but also for leaking details about China’s nuclear weapons to the West.
• If true, the accusation of selling nuclear secrets could suggest the Central Intelligence Agency has had some success in rebuilding its human spy network in China after having its previous network rolled up in conjunction with a mole at the agency over a decade ago. That would be consistent with our oft-stated belief that a US-China intelligence war was in full swing in recent years, at least until the administration’s recent effort to establish détente between the two countries.

Chinese Tech Industry: According to Bloomberg late last week, tech giants Alibaba and Baidu both plan to list their semiconductor-design units in the near future. Other Chinese firms are also reportedly planning chip-design IPOs or have recently completed them. The IPOs illustrate how China is making rapid progress developing its indigenous ability to produce chips for artificial intelligence. Indeed, the capital raised in these deals will likely accelerate the Chinese firms’ ability to compete with US tech giants such as Nvidia.

United Kingdom: Suella Braverman, the Conservative Party’s former home secretary, today became the latest prominent politician to defect from the center-right party to join the right-wing populist Reform UK Party run by Nigel Farage. With Reform UK leading in the public opinion polls ahead of key elections on May 7, many Conservative politicians see better electoral prospects by joining the new party, putting the future of the Conservative Party in doubt and strengthening Britain’s far-right.

US Fiscal Policy: After Immigration and Citizenship Enforcement officers shot and killed a US citizen in Minneapolis, Democratic Party leaders over the weekend said they may vote against a major appropriations bill that would fund the Department of Homeland Security as well as the Departments of Defense, Health and Human Services, Transportation, and Labor. Such a protest vote would shut down much of the federal government and potentially furlough thousands of workers again when the current stopgap funding bill runs out on January 31.

• The impact on the economy would likely be less than in last year’s broader shutdown.
• All the same, shutting down a department such as Labor could again disrupt the compilation of key economic data.

US Defense Strategy: The Pentagon on Friday released its new National Defense Strategy, which complements the administration’s December National Security Strategy. Focusing on how the administration plans to use the US military, the document raises “homeland defense” to the top priority and downgrades countering China to second place. It also says the administration will keep pushing US allies to take primary responsibility for their own defense. All the same, it vows to revitalize the US defense industrial base, which could be positive for US defense stocks.

US Weather: The big winter storm that struck from the Southwest to the Northeast over the weekend continues to disrupt life for up to 200 million US residents. At this point, the storm has caused almost 12,000 flight cancellations and has left approximately 900,000 people without power, mostly in the South. So far, it looks like Nashville is the hardest hit city, with 200,000 people going without electricity today. As always, we expect that any economic disruptions from such a large storm will prove temporary and have little lasting effect on the economy.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with the recent shift in US foreign policy toward increased interventionism, with a focus on Cuba. We also examine the finalization of the TikTok deal, the cooling of trade tensions between the EU and US, and the progress of the ongoing Ukraine-Russia peace talks. As always, we include a comprehensive roundup of essential economic data from the US and global markets.

Regime Intervention: Recent indicators suggest that the US government is poised to deepen its involvement in the Western Hemisphere over the coming months. A recent Wall Street Journal article highlights that the Trump administration is specifically targeting the Cuban government for removal before year’s end, as it has been emboldened by recent regional shifts. This policy is part of a larger effort to dismantle China’s growing presence in the Americas, marking a decisive pivot from traditional diplomatic engagement to a more transactional and assertive foreign policy.

• According to the report, Cuba’s political and economic situation has reached its most fragile point since Maduro was taken to the US. It has been speculated that the economy may be on the brink of collapse and is struggling to provide basic goods and medicine amid constant blackouts. Analysts believe this crisis could force the government into a political deal that would require moving away from its communist system toward a more democratic model.
• The initiative to dismantle the Cuban government appears to be the cornerstone of a long-term strategy to reshape the Western Hemisphere. The White House views the recent ouster of Nicolás Maduro as a solid proof of concept, demonstrating that the US can effectively engineer the transition of adversarial foreign governments. The objective is to force a new government to distance itself from Chinese influence while opening the island’s markets to American investors for the first time in decades.
• The White House’s new approach marks a definitive end to the era of the “benevolent hegemon.” In its place is a more assertive and transaction-based foreign policy. The US appears to be moving away from the soft-power goals of collaboration and regional stability, signaling to the world that future alliances will primarily be quid pro quo, with diplomatic moves measured by their direct benefit to US interests.
• This trend is exemplified by the recent establishment of the Board of Peace (BoP), a US-led international organization that serves as an alternative to the United Nations. Under its draft charter, countries can secure a permanent seat by contributing $1 billion to fund the charter. The board is structured with an Executive Board of US officials and is chaired for life by Donald Trump, granting him sweeping authority over its agenda and membership even after his presidency concludes.
• Market volatility has so far remained relatively low, as US actions have provoked more rhetoric than concrete retaliation. The absence of military confrontation and only a few isolated economic challenges have allowed markets to largely look past geopolitical tensions. The critical risk for investors is a change in this status quo. The formation of a coalition capable of mounting a serious economic or strategic challenge could trigger a sharp and prolonged rise in market instability.
• This environment is likely to favor commodities, as escalating tensions prompt nations to accelerate resource accumulation and stockpile precious metals like gold. Furthermore, the outlook for the aerospace and defense sectors remains highly favorable; global powers are expected to ramp up military expenditures significantly to safeguard their interests and deter emerging foreign threats.

TikTok Deal Done: The White House has finalized a deal to transfer key parts of TikTok’s US operations to a consortium of American investors. The agreement concludes a protracted saga that began with a proposed ban of the app over national security concerns. While its Chinese parent company, ByteDance, will retain ownership, the deal leases TikTok’s core content algorithm to the US entity, allowing it to be retrained and managed domestically. This arrangement signals a de-escalation in tensions between the US and China over tech concerns.

Bank of Japan: The Japanese central bank held its key rate steady at 0.75% in its latest meeting as it takes its time with tightening monetary policy. The bank’s outlook showed that policymakers expect growth and inflation to pick up over the coming months, suggesting it still plans to normalize policy after years of an accommodative stance. However, central bank officials indicated that next moves will be dependent on changes in the global economy, with the possibility of a slowdown leading the bank to moderate its pace of tightening.

EU-US Trade Resumes: EU lawmakers are expected to continue ratifying the US trade deal after having put it on hold following tensions over Greenland. The decision comes after the bloc expressed satisfaction with the White House’s reversal on its tariff threats. As a result, the European Parliament is expected to vote on the agreement in the coming days. This suggests that tensions between the two sides are starting to de-escalate as they look to finalize the arrangement.

Intel Slips: Concerns about a potential wafer supply crunch led to a sharp sell-off in Intel stock. While the company reported strong earnings, its outlook was bleak as the chipmaker claimed it may be unable to secure the memory chips needed to complete its orders. These concerns mirror those of Samsung, which noted weeks ago that competition for chips has led to an increase in costs that are being passed on to consumers. We are now seeing signs that AI-driven demand is beginning to drive up the prices of consumer discretionary goods.

Ukraine-Russia Deal: The White House is meeting with Russian and Ukrainian negotiators to help work out the final details of a peace deal. The focus appears on the Donbas region, where Russia controls about 90% of the territory, as Ukraine remains unwilling to cede land that Russia does not yet have in its control. These final talks suggest an agreement is within reach, potentially setting the stage for a post-war recovery. This deal could mean that these resource-rich regions will begin to boost exports, which would place downward pressure on grain and oil prices.

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