• The European Commission is escalating its pressure on Caribbean citizenship-by-investment (CBI) programmes, warning that their operation alone could now justify suspending Schengen visa-free access¹ for participating states. This shift places Antigua and Barbuda and other nations squarely in the spotlight.
• In its 8th annual Visa Suspension Mechanism report, the Commission abandoned its long-held demand for “genuine links” and instead declared CBI schemes run by visa-exempt countries to be an inherent security risk. “The operation of such programmes constitutes, in itself, a ground for suspending the visa-free status of third countries,” the report states. This marks a significant hardening of European Union (EU) policy and suggests that countries, even those making major reforms, could face punitive action.
• Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, and Saint Lucia are again singled out for operating “large-scale” programmes, which are viewed as a “significant and ongoing challenge” to EU border security. Across these five nations, over 100,000 citizenships have been granted through investment channels, with strong market demand continuing, as noted by the ⁠13,113 applications processed in 2023 and ⁠10,573 in 2024.
• Antigua and Barbuda’s programme has one of the lowest rejection rates, just 1.7%, a point the EU highlights as evidence that screening remains insufficiently stringent despite enhancements made in recent years.
• Regional governments, however, have worked to strengthen compliance, agreeing to a harmonised minimum investment threshold of US$200,000; stronger due diligence through international firms; and shared intelligence and cross-border security cooperation. Yet Brussels says these improvements do not remove the perceived threat. Instead, it now insists that heightened due diligence must continue “pending the discontinuation” of CBI schemes altogether, signalling that total shutdown, not regulation, is the long-term objective.
• CBI revenues remain a critical economic pillar for these countries, supporting housing and public infrastructure, debt management, post-COVID fiscal recovery, and climate resilience projects. Consequently, any move to suspend Schengen visa-free entry, a major selling point of the programme, could sharply impact investor demand and public finances for these nations.

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¹Schengen visa-free entry allows citizens from eligible countries (like the US, Canada, UK, Australia, Japan) to visit the 29 Schengen Area countries for tourism, business, or short visits (up to 90 days in any 180-day period) using only a valid passport, with no visa needed.

(Source: Antigua News)

• The Federal Reserve (Fed) on Tuesday, December 30, 2025, released minutes from its highly divisive meeting earlier this month, which concluded with a vote to lower interest rates again that appeared to be an even closer call than the final vote indicated. Ultimately, the Federal Open Market Committee (FOMC) approved a quarter percentage point cut by a 9-3 vote, the most dissents since 2019, as officials debated over the need to support the labour market against concerns about inflation. The move lowered the key funds rate to a range of 3.5%-3.75%.
• However, concerns arose about the FOMC's future level of aggression. Officials expressed confidence that the economy would continue to expand at a “moderate” pace, while they saw downside risks to employment and upside risks to inflation. The extent of the two dynamics divided FOMC policymakers, with indications that the vote could have gone either way despite the six-vote victory for the cut.
• The faction favouring keeping the rate steady “expressed concern that progress toward the Committee’s 2 per cent inflation objective had stalled in 2025 or indicated that they needed to have more confidence that inflation was being brought down sustainably to the Committee’s objective.” Officials noted that President Donald Trump’s tariffs were boosting inflation, but they also largely agreed that the impact would be temporary and likely abate in 2026.
• Since the vote, economic reports have pointed to a labour market where hiring is still slow, but layoffs have not accelerated. On the prices side, inflation has been slowly easing but remains a distance away from the Fed’s 2% target. At the same time, the broader economy continues to perform well. Gross domestic product soared in the third quarter, rising at a 4.3% annualised pace that was well ahead of estimates and a half percentage point better than the strong second quarter.
• However, most of the data carries a significant caveat as reports are still trailing as government agencies round up data from the dark period during the government shutdown. Even the reports coming in that are more current, at least from official sources, are being weighed with caution due to the data gaps. Consequently, markets largely expect the FOMC to stay put over the next few meetings as policymakers weigh incoming data.
• Also at the meeting, the committee voted to resume its bond-buying program. Under the new setup, the Fed will be acquiring short-term Treasury bills in an effort to calm pressures in short-term funding markets. The central bank initiated the program by buying US$40Bn a month in bills, staying around that level for several months before downshifting. A prior effort to reduce the balance sheet saw the Fed cut its holdings by about US$2.3Tn to its current US$6.6Tn.

(Source: Reuters)

• A year ago, as the dust settled from President Donald Trump’s re-election, Wall Street was confident that he would not follow through on his campaign promises about tariffs. By spring, reality had set in. The world’s largest economy had the highest effective tariff rates in nearly a century, and President Trump was committed to resetting the global trade system.
• At the beginning of 2025, the average United States (U.S.) tariff rate stood near 2.5%. That same rate now stands north of 15.0% after just less than a year of President Trump's second term in office. As the calendar flips to 2026, analysts see only limited opportunities for de-escalation in the year ahead.
• Trump's last major tariff move of the year came in November, when he removed tariffs on goods like coffee and cocoa, but elsewhere the president seems as intent as ever on keeping rates at current levels.
• The latest calculations from the Tax Foundation find that the average applied US tariff rate is 15.8%, while the Yale Budget Lab calculates an overall average effective tariff rate for consumers of 16.8%. Both outlets note these levels mark the highest rates in at least 80 years.
• Meanwhile, a Yahoo Finance review of tariff projections for 2026 saw 15.0% crop up again and again as a general rule of thumb when planning for tariffs in the coming year. In other words: not a major change. As Bloomberg Economics put it in a recent note, the global economy will now have to learn to live with American protectionism.

(Sources: Yahoo Finance & Wall Street Journal)

• Kingston Properties Limited (KPREIT) completed the acquisition of its third property in the United Kingdom (UK) on December 24, 2025. The property, known as Lakeview East, is a 17,000 SF Grade A office building located within Crossways Business Park in Dartford, which is a premier commercial park on the immediate outskirts of London.
• The building boasts a strong energy performance rating, aligning with KPREIT’s Environment Social and Governance (ESG) objectives and its disciplined focus on acquiring high-quality assets that meet evolving sustainability standards. The property is leased to a global shipping conglomerate with total assets of £264Mn and a reported net income of £20Mn in 2024. They have been in continuous occupation since 2009.
• Dartford is located approximately 20 minutes outside of Central London and has experienced significant population growth over the last 15 years, ranking among the fastest growing towns in England. Crossways Business Park is a well-established mixed-use development featuring office, industrial, and distribution spaces, attracting a diverse range of businesses.
• This acquisition further strengthens KPREIT’s exposure to resilient commuter-belt office locations supported by robust infrastructure, a diversified employment base, strong fundamentals, and institutional-grade tenants. This property represents the company’s third UK-based acquisition, following the purchase of Aztec West Business Park in December 2024 and Dorking Business Park in March 2025.
• The transaction was funded through a mix of debt and equity, bringing KPREIT’s geographic distribution to: Jamaica (42%), Cayman Islands (39%), the UK (16%) and the US (3%).
• KPREIT’s stock price has decreased 0.4% since the start of the calendar year. The stock closed Monday’s trading session at $9.39 and currently trades at a P/E of 13.8x, which is above the Main Market Real Estate Sector Average of 8.6x

(Sources: JSE & NCBCM Research)

• VM Wealth Management Limited (VMWM), a subsidiary of VM Investments Limited, in its capacity as Lead Broker, announced that the Initial Public Offering (IPO) of Dequity Capital Management Limited (the Company) was closed on December 18, 2025. However, the Company has taken the decision not to proceed with the IPO, as the minimum subscription amount ($500Mn) required under the Prospectus was not achieved by the Closing Date.
• All subscription amounts paid by Applicants will be refunded in full, without interest, in accordance with the terms of the Prospectus. Refunds will be processed within ten (10) Business Days of the Closing Date, and will therefore be completed no later than January 6, 2026, using the same channels through which applications were submitted.
• The IPO opened on November 27 and closed on December 18, 2025. The offer represented $394.5Mn common shares to the general public at J$1.00 per common share, and $263.0Mn reserved shares being offered at J$1.00 for strategic investors.
• The proceeds were primarily intended to settle debt obligations, fund working capital management for investment purposes, and cover the invitation and listing expenses. The cancellation of the IPO leaves Dequity’s $600Mn debt obligation unaddressed.
• With the bond maturing in February 2027, the firm needs capital to ensure it can fulfil its upcoming secured debt commitments. Alternatively, the company could refinance this debt, which currently carries an interest rate of 13.0% per annum, thereby reducing finance costs and supporting future earnings.

(Sources: JSE & NCBCM Research)

• The Dominican peso is expected to weaken by a further 3.9% in 2026 to end the year at DOP66.5/1USD, after falling by nearly 6.0% in the year-to-mid-December. The peso's depreciation in 2025 exceeds both pre-pandemic and more recent depreciation trends, with the currency reaching its all-time weakest level in 2025.
• This weakness comes on the back of lacklustre domestic growth, projected at just 2.5% in 2025 compared to 5.0% in 2024, and a narrowing Dominican Republic-United States (U.S.) policy rate differential. The differential has fallen by 275 basis points (bps) since December 2023, reducing the attractiveness of peso-denominated assets and putting downward pressure on the peso.
• Furthermore, following below-trend growth in the first half of 2025 (H1 2025), high-frequency GDP prints point to continued economic weakness, with zero growth in October following month-on-month contractions in the previous two months. Notably, most of 2025's depreciation has occurred in the second half of the year, with the peso falling nearly 8.0% from July 1 to December 8, after briefly and sharply strengthening in the second quarter (Q2) against a weaker U.S. dollar amid the onset of the trade war.
• Looking ahead, BMI analysts expect the Dominican peso to continue to depreciate in 2026, driven by weakness in tourism, a structural goods deficit, and a persistently narrow Dominican-U.S. interest rate differential.
• The Dominican peso's strength is closely tied to the policy rate differential between the US Federal Reserve and the Banco Central de la República Dominicana (BCRD), with a 1.0 percentage point decrease in the Dominican-U.S. policy rate differential associated with a 0.76% depreciation of the Dominican peso.
• With the BCRD expected to cut its policy rate by an additional 50bps in 2026 to support a sputtering domestic economy, alongside an expected 50bps reduction in the US federal funds rate in 2026, BMI anticipates that a persistently narrow policy rate differential will continue to weigh on the currency in the near term. The interest rate differential is projected to remain at 125bps in 2026, the lowest on record, which will be a headwind for the peso.

(Source: BMI, A Fitch Solutions Company)

• Petronas has completed drilling the Caiman-1 exploration well in offshore Suriname, marking the first well in a four-well drilling campaign planned for Block 52 over 2025–2026. The well represents an important early milestone as Suriname pushes to translate offshore discoveries into commercial development.
• According to Suriname’s national oil company Staatsolie, the Caiman-1 well was spudded^[1] on July 21, 2025, and safely plugged and abandoned^[2] on December 6, 2025. The results were described as encouraging and will feed into further appraisal and development concept studies for Block 52.
• Caiman-1 was drilled in the western portion of Block 52, an offshore area covering around 4,750 square kilometres in water depths ranging from 60 to 1,000 meters. The block lies approximately 140 kilometres off Suriname’s coast and forms part of the rapidly emerging offshore Guyana-Suriname Basin, which has attracted growing international interest following a string of regional discoveries over recent years.
• Drilling operations were supported from Suriname, with materials, fuel, and provisions supplied locally from Paramaribo. Crew changes and personnel transport to and from the drilling unit were also conducted via Suriname, reinforcing local content participation and creating business opportunities for domestic suppliers and service companies.
• Block 52 is one of several offshore areas where Suriname is seeking to replicate the exploration success seen in neighbouring Guyana. Beyond Petronas’ activity, Staatsolie continues to expand its offshore portfolio through partnerships with international operators. In a separate block, Block 61, Staatsolie signed a production-sharing contract with Cairn Energy in 2018, under which Cairn committed to seismic surveys and future exploration drilling on the Demerara Plateau.
• With Caiman-1 completed and additional wells planned, Petronas’ Block 52 campaign is expected to play a key role in determining whether Suriname can move from exploration success toward a commercially viable offshore oil project, potentially transforming the country’s long-term energy and economic outlook.

(Source: Oil Price)

^[1] Spud refers to the early stages of drilling when rock, dirt, and other sedimentary materials are removed with a drill bit.

^[2] Plugging and Abandonment is the process of safely closing oil, gas, CO2, or water wells that are no longer in use

• Economists view Trump’s “One Big Beautiful Bill” tax package as a major driver of U.S. economic activity in 2026, with benefits flowing to both households and businesses through larger refunds, higher take-home pay and stronger investment incentives.
• The bill makes permanent the lower individual and corporate tax rates from the 2017 Tax Cuts and Jobs Act, extends the larger standard deduction, expands the alternative minimum tax exemption, and raises the estate tax exemption from $14 million to $15 million.
• Individuals receive temporary breaks including: tax exemptions on up to $25,000 in tipped income and up to $12,500 in overtime pay (phasing out above $150,000 income), a new deduction of up to $6,000 for seniors, expanded State and Local Tax (SALT) deductions to $40,000, and a tax break on up to $10,000 in auto-loan interest for U.S.-assembled vehicles, all generally through 2029.
• For businesses, the bill makes permanent lower corporate tax rates and restores full expensing for qualifying equipment, allowing companies to immediately deduct capital purchases instead of depreciating them over time.
• U.S.-based research and development spending becomes fully deductible, with small businesses allowed to retroactively expense R&D costs back to 2022, a provision many independent experts see as especially supportive of growth.
• Additional business incentives include loosening limits on interest deductibility (returning to an EBITDA-based cap including amortization) and expanding the 20% deduction for pass-through businesses such as restaurants, law firms, medical practices, hedge funds, and private-equity firms, though analysts remain divided on its growth effects.

(Source: Reuters)

• Trump’s April “Liberation Day” tariffs rattled the bond market and triggered a sharp selloff, forcing the administration to recalibrate its approach. Since then, officials have been carefully shaping both policy and messaging to avoid a repeat, though investors caution that the détente (the ease of tension) feels temporary rather than secure.
• The fragility became clear on Nov. 5, when Treasury signaled it might issue more long-dated debt on the same day the Supreme Court began hearing challenges to Trump’s tariff program. Benchmark 10-year yields jumped more than 6 bps, reflecting renewed anxiety about both higher future supply and uncertainty over a key source of government revenue.
• Already uneasy about persistent federal deficits, investors feared that additional long-term issuance would drive yields higher and increase borrowing costs. At the same time, the legal questions surrounding tariffs raised concerns about how reliably the government could service its US$30.0Tn market-held debt.
• Analysts described the moment as a “reality check,” highlighting an ongoing standoff between markets and policymakers. Beneath calm headline moves, investors are intensely focused on whether Washington can rein in deficits, or whether rising yields will be used to force fiscal discipline instead.
• Investors warn that multiple shock risks could reignite volatility: tariff-driven price pressures, a bursting AI-driven asset bubble, or a Federal Reserve forced into a hawkish pivot if inflation resurges. Any of these could quickly bring “bond vigilantes” back into action.
• Despite official reassurances, history shows bond markets can punish perceived fiscal excess. April’s surge in yields, the steepest weekly increase since 2001, pushed the administration to soften tariffs and demonstrated how quickly markets can reassert discipline. Yields have since retreated, volatility has fallen, and surface calm has returned. But investors emphasize that vigilance remains high, viewing today’s environment as a fragile balance rather than a durable peace.
• Part of the current stability reflects supportive conditions: AI-linked investment has buoyed growth, the Fed has shifted toward easing, and Treasury has shown reluctance to flood markets with longer-dated paper, signaling sensitivity to yield pressures.
• Ultimately, markets view today’s calm as conditional. The administration may have delayed a confrontation with bond vigilantes, but with large structural deficits and ongoing policy uncertainty, many investors believe the risk of renewed stress remains very much alive.

(Source: Reuters)

• In its December 2025 Quarterly Monetary Policy Report, the Bank of Jamaica (BOJ) communicated that it revised its inflation outlook upwards, amid an adverse agricultural supply shock from Hurricane Melissa, second-round effects on services (household maintenance, transport, energy, personal care) and processed food inflation, alongside stronger domestic demand tied to rebuilding and reconstruction activity.
• Average headline inflation is projected to rise to 7.4% over December 2025–September 2027, up from 4.9% over the previous eight quarters, breaching the Bank of Jamaica’s (BOJ’s) target range over the next year and peaking at 11.5% in the June 2026 quarter before easing back within target toward the end of the near term as supply conditions improve. The Comparative Core Inflation Forecasts (CPIAF) is similarly forecast to average 6.1%, higher than the 4.6% average over the prior two years.
• Imported inflation, notably from grains and oils, is expected to remain generally stable, while the first-round impact of higher U.S. tariffs is projected to be marginal, adding only approximately 0.1 percentage point on average to domestic inflation over the next eight quarters.
• Inflation expectations are projected to rise from 5.8% in the September survey to above the upper bound of the target range and remain elevated in the near term. The output gap is forecast to be negative in December 2025–March 2026, then turn positive as reconstruction, supported by an expansionary fiscal stance, gains momentum, with the gap closing by March 2029.
• S. demand is expected to soften with its output gap turning negative from June 2026 as oil prices are projected to decline by about 1.0% QoQ on average, U.S. LNG prices set to rise gradually, and freight costs have fallen sharply (-41.3% by September 2025). These are partly offsetting inflationary pressures amid reduced U.S. import demand due to higher tariffs.

(Source: Bank of Jamaica)