Deflationary Pressure In Asian Economies
Tuesday, Sept 2nd, 2025
World News - Trump Weighs Declaring Housing Emergency
Bloomberg
Treasury Secretary Scott Bessent announced that the Trump administration is considering declaring a national housing emergency this fall to address the escalating issue of housing affordability, which is expected to be a central pillar of the Republican platform for the 2026 midterms. While Bessent did not specify concrete actions, he indicated that the administration is evaluating strategies such as standardizing local building and zoning codes and reducing closing costs, aiming to improve housing access without overreaching into state and local governance. President Trump has previously deployed emergency declarations to bypass Congress on key issues, and his administration contends that high interest rates and pandemic-driven disparities have worsened the housing crisis, hurting buyers with elevated costs. Notably, housing affordability was also a priority for Kamala Harris in her 2024 campaign, where she proposed tax credits for builders and significant down payment assistance. During his campaign, Trump promised to expand housing by opening federal land for development and cutting housing regulations, reflecting the administration's continued emphasis on easing housing challenges through federal intervention.
Tech - The Rise of AI In Beer-making
Economists
AI is increasingly transforming the beer industry, with breweries such as Beck’s, Atwater Brewery, and St Austell Brewery all using artificial intelligence to create innovative new beer recipes that have been well received by customers. Not only can AI analyze and optimize complex flavors using available ingredients and brewing equipment, as seen with Atwater’s citrusy IPA and Coedo Brewery’s custom brews for different age groups, but it also inspires combinations that human brewers might never have considered, like blending Maris Otter malt with Belgian candi syrup in a lager. Customer reviews and industry feedback show overwhelming positivity for these AI-designed beers, and scientific research is leveraging machine learning to deepen understanding of beer chemistry, linking aroma compounds with taste preferences. Yet, experts emphasize that while AI will become more involved in formulating recipes, the irreplaceable craft of brewing—from handling ingredients to taste-testing—remains firmly in human hands.
Economics - Deflationary Pressure In Asian Economies
Economists
Deflationary pressures are mounting across Asia’s economies, with average inflation among the continent’s ten largest markets now just 1.3% and outright price declines seen in China and Thailand, largely driven by Chinese overcapacity, slumping commodity prices, and sluggish domestic demand. China’s export-price index has dropped 15% since 2022, undercutting prices not only at home but also regionally, as cheap Chinese goods—like cars in Thailand and smartphones in Vietnam—drag local prices down. Additionally, oil and food prices have cooled due to increased production and supply, while weak wage growth, structural economic issues, and subdued consumer confidence have further suppressed demand and inflation. Even though Donald Trump’s tariffs are expected to deepen these trends by curbing American demand for Asian exports, the roots of Asia’s deflation go deeper and predate the recent policy changes, making falling prices less a boon for consumers and more a warning sign of underlying economic fragility.
The Daily Spark
The chart below shows quoted bid-ask spreads for public investment grade credit as a function of bond-level spread volatility. Both on-the-run and off-the-run bonds see higher transaction costs as spreads move, but the increase is far more pronounced for off-the-run bonds. This helps to explain why volumes remain depressed even in volatile periods.
The bottom line is that liquidity in public and private credit is converging, and in some cases where private credit is included in ETFs, private credit may even be more liquid than some segments of public credit.
Quote of the Day
“A painter should begin every canvas with a wash of black, because all things in nature are dark except where exposed by the light.” ― Leonardo da Vinci