Trump Called Jerome a ‘Numbskull’
Fresh Off the Oven Newsletter
It’s good to be back after a holiday.
This week, I have a lot in store for you.
- Trump called the Fed a ‘numbskull’ and does not know how the Fed functions.
- Economics update from China is BIG this week
- Tesla, Tencent Music and Capital A made the news
- How misery and sadness strengthen bonds
Meme Comic to Send You
Economics At Your Fingertips
China
Inflation
Is China in a Japan-like Lost Decade? It certainly looks like so. Inflation for May 2025 is at -0.1%, the same as in April 2025.
Deflation is China’s biggest enemy now. Japan got a big bust in its stock and property market in 1992 and had to deal with deflation and a slow economy for 20 years.
Exports
Meanwhile, from the export side, after strong numbers in March and April as exporters rush to export before tariffs kick in, exports for May 2025 moderated to 4.8%.
In particular, U.S. exports crashed by 35% for the month. However, with China and the U.S. suspending tariffs on each other and coming to the negotiation table, hopefully, things will work out.
Retail Sales and Industrial Production
There’s something positive this week from China. Retail sales, which measure how much Chinese are buying, rose to a strong 6.4% in May 2025, which was stronger than the market expectations of 5.1%.
Meanwhile, industrial production, which measures how much factories are making, was lower at 5.8% for May 2025.
The United States
Inflation
Not much from the U.S. side last week. Inflation rose to 2.4% in May 2025 from 2.3% in April 2025. This is still within the comfort zone of the Federal Reserve’s 2% inflation target.
While Trump has repeatedly called for the Fed to cut interest rates (due to recession pressures caused by his tariff policies), the Fed is probably keeping interest rates at the current level in case the tariffs does go through in the coming months.
Malaysia
Retail Sales
Wholesale and retail sales growth came down to 4.7% in April 2025 from 5.7% in March 2025.
This downward trend was due to strong sales during the Raya period in March 2025, where Malaysians generally pull back on spending after that.
Industrial Production
Malaysia’s industrial production rose to 4.8% in April 2025 from 3.7% in March 2025, driven by the electrical and electronic sector.
Export-oriented sectors lead the charge with a higher growth of 5.3% compared to the domestic sectors at 3.6%.
Companies To Knock Your Socks Off
Tesla (Listed in the U.S.)
Tesla is getting into the headlines for the wrong reasons. And you have Elon Musk to blame for that.
That has always been my gripe about investing in politically-linked companies. Investors are typically taken for a ride depending on the companies’ relationship with the political elites.
And Tesla got the brunt of that. After the sudden collapse in the Trump-Elon bromance, Tesla’s share price collapsed by 14.3% to $285 on 5 June 2025.
Luckily, it has since recovered to $325 currently, driven by news flow on Robotaxi testing. But be wary about the company.
- Financial results have not been great. Revenue declined by 9% for the latest financial quarter.
- Tesla is losing its position to Chinese EV players in the world. Global market share of Tesla declined to 12% in 1Q 2025 from 14% in 4Q 2024.
Tesla is rated at a HOLD position now with a target price of $306.
Tencent Music (Listed in China)
Tencent Music got in the news last week, with its plans to acquire Ximalaya for US$2.4 billion.
Ximalaya is a platform that enables users and companies to distribute audiobooks, podcasts, music, variety entertainment programs, news and other audio content.
This is a logical move for Tencent to consolidate its market position. Ximalaya’s revenue will contribute around 20% to Tencent Music’s revenue.
Currently, Tencent Holding (the parent company) is the largest company in China with a market cap of US$600 billion.
- Share price performance has been astronomical. It is up by 60% since the beginning of the year.
- It recently doubled its profits to HK$5.1 billion in 1Q 2025.
Markets have Tencent at a HOLD with a target price of HK$70.3 (current share price: HK$72.7).
Capital A
Well, Capital A’s scorecard could be improving and living up to the A in its name.
It is at the final stage of exiting its PN17 status. PN17 companies are financially distressed and will need to submit plans to Bursa Malaysia on how to get out of the situation.
If you didn’t know, Capital A is AirAsia. But it has since expanded the company to include other services such as food delivery, ride-hailing, telecommunication and financial services.
Capital A has incurred losses for 4 years since 2020, with only one year of profit.
Markets have Capital A at a BUY with a target price of RM1.27.
Story of the Week
If you have read the comic above, just know that Trump basically called Jerome Powell a ‘numbskull’ for not cutting interest rates.
His case?
Inflation is now near the 2.0% target, and the economy is in trouble.
Fox News (Trump’s lap dog) have been running pressure campaigns on the Federal Reserve to cut interest rates.
Let’s examine the case.
Is inflation near the 2.0% target? Yes and no.
- Inflation for May 2025 is at 2.4%, but has risen from 2.3% in April 2025. Furthermore, Trump’s tariff policy, if it goes through, will raise inflation again.
Is the economy in trouble? Maybe.
- This depends on whether the tariffs go through again. If it goes through, U.S. consumers could stop spending and lead the economy into a recession.
The U.S. have checks and balances. This is to prevent any one political force (the President, the legislative branch, and the courts) from being too powerful.
The Federal Reserve (and central banks in general) basically have the mandate to be ‘independent’ to set monetary policy.
If it is not and is subjected to the President’s will, then it can keep printing money to finance the President’s projects. And that is called a dictatorship.
The Federal Reserve’s mandates are to:
- Keep inflation low and stable
- Encourage steady economic growth
It is not to fix the U.S. president’s mess.
Something Philosophical to Reflect On
If sympathy says, “I feel for you,” and empathy says, “I feel with you,” compassion says, “Go ahead and cry. I am not going anywhere.”
by Mariana Alessandri
I recently read the article ‘Misery loves company’ by Mariani Alessandri from the New Philosopher.
And if you think this is a sob story, think again. It explores the role of being sad and miserable, and how it invites others to empathise with you.
Vulnerability opens up the person to seek help and comfort from others and the community around him or her.
And it also opens up others to feel comfortable talking about their misery and sadness. Because if others talk about it, the stigma goes away.
To me, this was an important lesson, and especially so because I am a man and also a father now.
I have been brought up to suppress my feelings and emotions by my family and society in general, and not talk about them.
I feel sad and miserable from time to time, but it is always in the context of just being alone. I only learn about opening up when I had severe anxiety during work, and opened up about it to a therapist.
And when I spoke about such emotions to my family and partner, I found out that they too had similar problems. They are not the same problems, but it’s a relief that everyone else had problems too.
I actually read the article by Mariani Alessandri on the New Philosopher magazine through the Libby app using the U-Pustaka account.
You can sign up for a free U-Pustaka account here and just follow the instructions. All you need is an email and your MyKad (Malaysian only).
From there, you can log in to Libby using the U-Pustaka account and enjoy all the books and magazines for FREE!.
If you have read all the way to the end, you are a champ. Thank you so much for reading my content and if you like it, give the channel a subscribe.
Appreciate all the support.
