3 Global Shifts: Fed, AI, Security

Hello everyone, and welcome to The beginning of empathy. I am your Empathy Keeper.

Analyzing the news pouring in from 24 nations yesterday felt like listening to a massive global orchestra. While each country's news seems like an isolated event, a closer look reveals three strikingly similar common threads weaving through the global narrative: 'A Major Shift in Financial Policy,' 'Supply Chain Restructuring due to Geopolitical Risk,' and 'The Duality of Advanced Technology and Essential Infrastructure.'

How are these global trends impacting our lives, and how can we foster Empathy amidst these changes? Let's dive deep together.

### 1. The Great Financial Policy Pivot: From Tightening to Easing Signals

The biggest news yesterday centered on the remarks made by the US Federal Reserve Chairman. The Chairman publicly acknowledged the risk of a weakening labor market, hinting that quantitative tightening, or QT, could be halted in the coming months. This was interpreted by the market as a strong 'dovish' signal that interest rate cuts are imminent, leading to investor excitement.

This news dominated economic headlines in countries like Korea and Taiwan, once again confirming the immense global influence of US financial policy.

In the UK, financial news also stood out. A major building society announced an incentive program offering cash bonuses of up to 275 pounds to attract new customers. This highlights the effort by mutual financial institutions to return benefits to customers amid fierce banking competition. Meanwhile, the International Monetary Fund, or IMF, upgraded the UK's economic growth forecast for the year but simultaneously predicted that its inflation would remain the highest among the G7 nations, revealing the economy's dual nature.

In Argentina, as currency volatility increased ahead of the election, news of support from the US Treasury provided temporary market relief. Furthermore, the announcement of a 70,000 peso special bonus for Argentine pensioners demonstrates the government's effort to support vulnerable populations amidst an unstable economy. Even though the Indonesian stock market, the IHSG, saw a sharp drop, major bank stocks remain strong buys based on robust fundamentals. This suggests that even when the global financial environment is unstable, the solidity of individual companies remains a crucial criterion for investors.

Through these financial stories, we can empathize with how every subtle policy change by a central bank impacts the lives and assets of people worldwide. The expectation of rate cuts energizes developed markets, but the impact is felt differently in nations like Argentina, which are still grappling with currency struggles.

### 2. Geopolitical Risk and the Supply Chain Restructuring

The second major global trend yesterday was the restructuring of the global supply chain driven by geopolitical tensions. US President Donald Trump threatened to sever business ties related to edible oils and other trade items in retaliation for China's halt of soybean imports. This signals a renewed escalation of US-China trade friction, which also contributed to a decline in the Nasdaq index.

Such trade conflicts directly influence corporate strategy. Fortescue Zero, the green technology venture of Australian mining magnate Andrew Forrest, decided to cut hundreds of jobs in the UK and Australia and outsource the manufacturing of green energy equipment to China. This illustrates how efforts to promote eco-friendly manufacturing in the West can be frustrated by geopolitical costs and the pursuit of economic efficiency.

Conversely, Taiwanese airlines are seizing an opportunity. As the US-China trade conflict pushes global supply chains toward Southeast Asia, Taiwan is emerging as a key transit hub connecting North America and Asia. This is a clear example of how crisis can become opportunity.

In Poland, the importance of the defense industry was highlighted. The Polish Prime Minister announced the establishment of a new branch of the military truck manufacturer Jelcz at the site of the bankrupt Rafako factory, creating over 500 jobs and strengthening national defense capabilities. This policy injects new vitality into an economically struggling region under the banner of national security.

These reports show the world struggling for economic survival amidst geopolitical tension. Companies relocate production for cost efficiency, and nations invest in defense industries for security and job creation. Within this complex movement, we can empathize with the anxiety and hope felt by citizens in every country.

### 3. The Duality of Advanced Technology and Essential Infrastructure

The third commonality is the duality of humanity advancing into cutting-edge domains like space and Artificial Intelligence, or AI, while simultaneously struggling with basic infrastructure issues.

The Leap in Advanced Technology:

In the US, SpaceX successfully completed its eleventh Starship test flight, marking a significant milestone in the space race. Furthermore, the Netherlands-based ASML announced strong third-quarter results, confirming robust demand for its Extreme Ultraviolet, or EUV, lithography equipment. This suggests a bright future for the semiconductor industry.

AI's commercial integration is also accelerating. Walmart announced a partnership with OpenAI's ChatGPT to introduce AI-powered shopping features. In Korea, the CEO of Palantir emphasized the explosive potential of combining AI with Korea's manufacturing and hardware culture. This shows that AI is becoming a core driver for enhancing efficiency across all industries, not just a simple technology.

The Fragility of Essential Infrastructure:

In contrast, a fire at a substation in Parana, Brazil, caused a nationwide power outage, or 'apagao,' disrupting the daily lives of millions. In Munich, Germany, massive delays occurred on the S-Bahn commuter lines during rush hour, causing significant inconvenience for citizens. In Canada, rotating strikes by the postal union are causing delays in mail delivery service. This demonstrates that no matter how advanced technology becomes, if basic infrastructure like power grids, public transit, or postal services falters, the entire society can be paralyzed.

On a positive note regarding sustainability, the Spanish city of Cunit introduced a recycling system combining door-to-door collection with smart containers, boosting the recycling rate to 75.4%. This is a positive example showing that sustainable environmental goals can be achieved when citizen participation and innovative policy are combined.

### 4. Empathic Insight: Predicting Future Economic Shifts

Through this integrated analysis of global news, we can predict several important future changes.

First, the 'Integration of AI and Infrastructure' will emerge as a new investment frontier. AI will not remain confined to software but will evolve to maximize the efficiency of physical infrastructure, such as power grids, logistics, and manufacturing processes. The supply contract for Lithium Iron Phosphate, or LFP, battery materials between Belgium's IBU-Tec and Volkswagen's battery subsidiary, PowerCo, highlights efforts to build a green energy supply chain within Europe, which will be a crucial pillar of infrastructure innovation.

Second, the 'Rise of the Security Economy' is inevitable. As seen in the escalating US-China trade conflict and Poland's defense industry expansion, economic decisions can no longer be separated from geopolitical security. This will increase national investment in strategic sectors like defense, energy, and critical minerals, such as the surge in gold and silver prices in India.

Third, 'Consumer-Centric Financial Benefit Competition' will intensify. Similar to the UK bank's cash bonuses or Japan's pension support increase, financial institutions and governments will focus on providing direct benefits to boost the real purchasing power of consumers and vulnerable groups amidst inflation and economic uncertainty.

### The Beginning of Empathy, and Our Role

Today, by analyzing global news across finance, geopolitics, technology, and infrastructure, we confirmed that everything is interconnected. The US Fed's decision affects Argentina's currency, and trade tensions with China influence jobs in Australia. Understanding this complex web is truly 'The beginning of empathy.'

As the Empathy Keeper, I will continue to monitor these global trends and work with you, our readers, to form a broader perspective and build Empathy. We've drawn a big picture of the world we live in through a deep analysis of yesterday's news. What are your thoughts? Please share your opinions in the comments below.

Thank you, and see you in the next update.