US: Viewpoint On Anthropic's Mythos Model
A follow-up on the earlier bullet, this time by EndGame Macro on X, giving his take on why Washington would be treating Anthropic's model like it is a market risk. https://x.com/onechancefreedm/status/2042419691772158013?s=20
- "What They Are Probably Trying To Do: In my opinion Bessent and Powell would be trying to do three things at once. First, warn the largest institutions that the offense and defense balance in cyber may be shifting faster than normal patch cycles can handle. Second, force immediate coordination across the firms that matter most to payments, clearing, custody, and market functioning. Third, send a quiet signal that this is now being treated as a national security and financial stability problem, not just a private sector technology issue. That is why a joint move from Treasury and the Fed would make sense. Treasury handles critical infrastructure coordination. The Fed worries about systemic transmission. Put together, that is not a panic meeting. It is what responsible officials would do if they believed the next systemic shock might begin with code instead of credit."
- "My Take: The dominant motive here is genuine defensive coordination. There may also be a secondary layer of regulatory signaling and political optics, because Washington rarely does only one thing at a time. But the core logic is still the same. In a stronger economy, this would be serious. In a slowing economy with hotter inflation expectations and geopolitical stress, it becomes urgent. The real message is not that officials suddenly became AI alarmists. It is that they seem to believe the next confidence shock to the financial system may not start with bad loans, leverage, or a bank run. It may start with an AI model that collapses the time between discovering a vulnerability and exploiting it."
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RBA: Westpac Now Forecasting +25Bps In March & May
Local bank Westpac is now penciling in +25bps moves at the March and May policy meetings, taking the peak cash rate to 4.35%, see below for their viewpoint. NAB is also forecasting the RBA to hike in March and May, while late yesterday BoFA penciled in a March hike, while earlier today UBS did the same. This follows some hawkish remarks from RBA Deputy Governor Hauser in a podcast late yesterday, while Governor Bullock also stressed recently the March meeting was live. As Westpac notes below, the key shift has been the surge in oil prices, along with the RBA view of limited spare capacity.
- Westpac: "The RBA is now expected to hike rates 25bp in both March and May; this is a change from our previous view of a single hike in May with further hikes as a risk only. The expected peak cash rate is now 4.35%. The effect of higher oil prices on headline inflation is large but temporary. The RBA Monetary Policy Board will nevertheless feel compelled to react, especially given the hit to confidence and financial markets has so far not been severe. Key information shifting our view is RBA communication revealing it has not changed its pessimistic view of growth in supply capacity following the national accounts, even though data revisions, consumption and unit labour costs paint a more benign picture."
CHINA PRESS: A-shares To Trend Upward Aimd Market Resilience
The A-share market will likely trend upward despite significant fluctuations in the oil and gas sector, supported by recovering investor sentiment and increased market resilience, according to an article published on Yicai.com by Qin Huanmei, a researcher at the Institute of Chinese Modernization at Shanghai University of Finance and Economics. Authorities should strengthen support for the listing of hard technology companies and enrich the index system of the Science and Technology Innovation Board. It is also necessary to improve the information disclosure system, enhance regulatory transparency, refine the stock pricing mechanism and promote mergers and acquisitions to strengthen market resilience, the article said.
CHINA PRESS: Global Demand Supports Rapid Trade Growth
China’s rapid trade growth in the first two months was supported by improved global demand, the country’s industrial competitiveness and a low comparison base over the same period of last year, said Zhang Jianping, deputy director of the Academic Committee at the Chinese Academy of International Trade and Economic Cooperation. The global market has effectively absorbed the adverse effects of trade frictions, with overall expectations staying positive, said Zhang. Exports and imports rose 19.2% and 17.1% y/y in yuan terms, with private enterprises performing exceptionally well. (Source: Securities Times)
