On December 23, Federal Reserve Governor Milan warned that if the U.S. central bank does not continue to cut interest rates next year, it could heighten the risk of an economic recession. Milan noted that recent employment data suggests unemployment may be "higher than previously expected," a signal strong enough to push the Fed toward further monetary easing. Since joining the Fed in September, Milan has advocated for more aggressive rate cuts. His term ends in January next year. Regarding future policy adjustments, Milan stated that the Fed has already cut rates by 75 basis points since September, reducing the urgency for another 50-basis-point cut in the next meeting. However, he has yet to finalize his stance. "Policy may shift from broad adjustments to finer calibrations, but whether we’ve reached that stage requires observing the effects of a few more rate cuts," he added. This month, the Fed cut rates by another 25 basis points, but internal divisions over the future path remain. Most officials expect only one more rate cut next year, while recent public remarks suggest a wait-and-see approach until economic prospects clarify. Meanwhile, some regional Fed presidents expressed concerns over inflation remaining nearly a percentage point above the 2% target, while rising unemployment has intensified worries about a weakening labor market, complicating the Fed’s balancing act between growth and inflation.
**Key Updates** - **China Fortune Land Development (600340.SH)**: Shareholder Ping An Life proposed five additional interim motions for the 2025 third extraordinary shareholders' meeting, including a detailed explanation for the underperformance of the company’s debt restructuring plan and the removal of non-independent director Feng Nianyi. However, the motions were rejected by the board. - **Far East Consortium International (00035.HK)**: Announced plans to sell its Plaza Damas commercial development project for MYR 55 million. The board believes the deal aligns with its strategy to divest non-core assets, unlock value, and improve liquidity. - **Sun Hung Kai & Co. (00086.HK)** and **Allied Group (00373.HK)**: Jointly disclosed a binding commitment to invest up to $100 million (approx. HKD 778 million) in a Trian Partners-managed fund targeting the acquisition of JHG, a NYSE-listed global asset manager with $484 billion AUM.
**Bond Market Developments** - **Pudong Development Bank** announced that the proposal to adjust the repayment terms for "22 Vanke MTN004" was rejected, while the extension of the grace period to January 28, 2026, was approved. - **NEW WORLD DEV (00017.HK)**: The Cheng family reportedly hired advisors to sell the Rosewood Hotel in London’s Holborn district.
**Primary Market Issuance** One company issued bonds today.
**Rating Updates** Three companies saw rating adjustments.
**Market Trends** - China’s 2Y and 10Y government bond yields stood at 1.37% and 1.84%, respectively. - U.S. 2Y yields fell 4bps to 3.44%, while 10Y yields rose 1bp to 4.17%.
**Top 10 Movers in USD Bonds** - **Dalian Wanda Commercial’s** subsidiary reported over 96% approval for its consent solicitation on DALWAN 11 02/13/26. The group is exploring financing options, including potential new bond issuances.
**Macro News** The PBOC injected CNY 59.3 billion via 7-day reverse repos at 1.40%, with CNY 135.3 billion maturing, resulting in a net withdrawal of CNY 76 billion.
