“Come not between the dragon and his wrath” This morning’s meeting in Busan, Korea was short and sweet. Goal achieved - the global meltdown that would have followed a rare-earth embargo by China has been avoided. What is more interesting is how it could change the current power set-up in Washington as Scott Bessent and Marco Rubio increasingly takecentre stage.Two events and One Big Question for Global Markets toconsider this morning:What really happened in Busan, South Korea this morning?What did the Fed tell us about the path of US interestrates?What do they tell us about global power and influence?The noise from the Trump/Xi meeting in Korea was exactly asexpected: There was de-escalation of Trade War rhetoric including port charges levied on shipping. A 1-year trade deal (cease fire) is in the offing. Tariffs were cut to 10%. Agreement was (apparently) reached that China will hold back on rare-earthexport controls while the USA scales back export bans on advanced chips. China will buy American Soya Beans – sparing US famers from bankruptcy. A full summit in Beijing next year, followed by a visit to DC. Thus spake Trump. (I would love to know what Xi thought.) The apparent agreement was all pretty much as alreadynegotiated by Trump’s adult-in-the-room Treasury Secretary Scott Bessent. As such, it’s all positive for a less destabilised global trading system, although still plenty of things to be ironed out, like Russian oil and Ukraine. Markets should like it. However, the optics of the summit looked less than convincing.Trump stood there waiting to greet a great chum with charm, flattery and lashings of shmooze. He piled on the compliments. Xi barely acknowledged any of it – his comments about frictions and relationships emphasised this was a meeting of equals. But his body language looked like a man who was there in “necessary but distasteful toleration” mode of Trump. That doesn’t actually matter much. The die are already cast.

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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