U.S.–Ukraine Peace Talks Continue; BOJ Rate Hike Expectations Rise

Summary:

U.S.–Ukraine delegations to continue discussing peace plan on the 15th; Japanese manufacturing confidence hits four‑year high......

[Quick Facts]

1. U.S.–Ukraine delegations to continue discussing peace plan on the 15th.

2. Trump again outlines economic vision: Calls for sharp interest rate cuts.

3. Shifting UK political landscape? Reform UK claims more members than Labour, becoming the largest party.

4. U.S. pressure on Venezuela escalates further, shifting from oil sanctions to the threat of ground operations.

5. Zelenskyy: Russia–Ukraine peace plan may include compromises, but must be fair.

6. Trump: Warsh is at top of Fed Chair candidate list.

7. Trump unsure whether Republicans can retain House control in next year's midterms.

8. Japanese manufacturing confidence hits four‑year high, adding a key reason for BOJ rate hike this week.

[News Details]

U.S.–Ukraine delegations to continue discussing peace plan on the 15th

On December 14th, local time, a Ukrainian presidential adviser said talks between Ukrainian and U.S. delegations on a peace plan lasted more than five hours in Berlin and will continue on the 15th. On the 14th, both sides held closed‑door consultations in the German capital on the "peace plan" proposed by the United States to end the Russia–Ukraine conflict. U.S. representatives included President's Special Envoy Witkoff and President Trump's son‑in‑law Jared Kushner, among others. The Ukrainian side was led by President Zelenskyy and also included Secretary of the National Security and Defense Council Rustem Umerov and Chief of the General Staff Andrii Hnatov.

Trump again outlines economic vision: Calls for sharp interest rate cuts

U.S. President Trump said he hopes to see interest rates fall to 1% or lower within a year, far below the current Federal Reserve policy range. He argued that today's high inflation was inherited from the previous administration and predicted that by election time in a few months, price conditions in the U.S. would be quite favorable. He also revealed he is considering taking stakes in defense companies and noted his promoted U.S. investment plan has not yet fully taken effect. Regarding the upcoming midterm elections, Trump expressed uncertainty, admitting he is unsure if current economic policies can help Republicans win.

Shifting UK political landscape? Reform UK claims more members than Labour, becoming the largest party

According to a December 12th report on the Daily Telegraph website, leaked data show Labour membership has fallen below 250,000, while Reform UK's self‑reported total membership is nearly 269,000, allowing it to claim it has overtaken Labour as Britain's largest party. Reform UK leader Nigel Farage called this a major milestone for the party and declared the era of two‑party politics over. If accurate, this deals another major blow to Keir Starmer's Labour, reflecting how traditional mainstream parties may face challenges from emerging political forces. Reform UK is known for emphasizing sovereignty, immigration controls, and its rising influence could reshape British political issues and electoral dynamics.

U.S. pressure on Venezuela escalates further, shifting from oil sanctions to the threat of ground operations

On December 12th, U.S. President Trump threatened the Venezuelan government again, saying ground operations against drug cartels there will soon begin and stressing land operations are relatively easy to execute. Trump claimed the U.S. has already blocked 96% of drugs attempting illegal entry and that the next focus will shift to ground actions. He had previously warned of expanding strikes against Venezuelan cartels from sea to land. In response, Venezuelan Defense Minister Vladimir Padrino López accused the U.S. of trying to blockade the Caribbean to seize natural resources and said Venezuela is mounting resistance. This marks a new phase in U.S. pressure on Venezuela, moving from primarily economic measures such as oil sanctions toward more direct and public military threats, heightening regional tensions.

Zelenskyy: Russia–Ukraine peace plan may include compromises, but must be fair

On December 14th, local time, Ukrainian President Zelenskyy said the peace plan to resolve the Russia–Ukraine conflict will not satisfy everyone and will inevitably involve various compromises. He noted the plan will not be universally liked and that many compromises exist in its various versions. Ukraine has submitted the latest opinions and revisions on the plan to the United States, stressing that any compromise must be based on fairness. Most importantly, the plan must be as just as possible, especially for Ukraine, and must be effective—not merely a piece of paper—but a significant step toward ending the conflict. He emphasized the plan must ensure Russia cannot launch new military actions against the Ukrainian people after it is signed.

Trump: Warsh is at top of Fed Chair candidate list

Trump said he prefers either former Fed Governor Kevin Warsh or White House National Economic Council Director Kevin Hassett to succeed Jerome Powell as Fed Chair, with Warsh being his first choice. Trump expects to nominate a Fed chair candidate soon.

His remarks were welcomed on Wall Street because another leading candidate, Hassett, might be more inclined to follow the White House's desire for rate cuts, potentially triggering market countermoves and harming Fed independence. Still, Trump stressed the next Fed chair should consult him on interest rate matters and reiterated his hope rates will drop to 1% or lower within a year.

Trump unsure whether Republicans can retain House control in next year's midterms

Trump said he is uncertain whether Republicans can keep control of the House in next year's midterms because some of his economic policies have not yet fully taken effect. In an interview with The Wall Street Journal, Trump noted parts of his economic agenda need time to work, as he strives to attract greater foreign investment in the U.S., which will help transform the economy. However, it is unclear when all measures will be in place or whether they will yield political gains for Republicans in the November 2025 midterms. On the Supreme Court reviewing Washington's global reciprocal tariffs, Trump said if the court opposes them, the U.S. will suffer consequences, and he would consider other tax methods, though less efficient. He believes U.S. inflation is a legacy issue from the previous administration and expects improvement by the time campaigning begins in a few months.

Japanese manufacturing confidence hits four‑year high, adding a key reason for BOJ rate hike this week

The Bank of Japan's quarterly Tankan survey released Monday showed large manufacturers' business sentiment index rose from 14 in September to 15, a four‑year high and in line with market expectations. Meanwhile, the large non‑manufacturing index remained at a strong 34, close to its peak since the early 1990s.

This key data indicates Japanese firms generally view operating conditions as favorable and so far have not been significantly affected by U.S. tariffs. The robust result further strengthens market expectations that the BOJ will raise rates at its meeting this Friday. If implemented, it would be the first hike since January this year, marking an important turning point in Japan's monetary policy.

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