The plot ahead

Good morning. The US Federal Reserve is expected to lower rates for a third-straight meeting today. Elon Musk looks to make an English friend. And Opinion’s Tyler Cowen argues this country’s food is the best in the world. Listen to the day’s top stories.

The Federal Reserve is expected to lower rates by 25 basis points today, with focus on Chair Jerome Powell’s posturing for January and an updated “dot plot” of economic projections that may to point to just three cuts in 2025. But some options traders are betting the market’s view is too hawkish, and there will be more rate reductions than what’s currently anticipated.

Panic in Brazil. Traders are saying “sell first, ask later” as the prospect of a financial crisis engulfs assets from stocks to local-currency debt. The widening rout shows investors are increasingly skeptical that President Luiz Inacio Lula da Silva is serious about reining in a soaring fiscal deficit. Brazil’s lower house approved the first part of Lula’s plan to cut the equivalent of about $11.5 billion in spending.

In Canada, Prime Minister Justin Trudeau tried to downplay the most serious challenge yet facing his leadership, alluding to the sudden resignation of Finance Minister Chrystia Freeland on Monday. “Like most families, sometimes we have fights around the holidays,” Trudeau told a holiday gathering for his Liberal Party. Donald Trump chimed in, inviting Canada to become the 51st US state.

Elon Musk is making friends across the pond. Nigel Farage, leader of the populist Reform UK party, wrote in a local newspaper that he’s in “ongoing negotiations” with Musk about a political donation. Musk is reportedly considering giving up to $100 million. Less friendly: Senator Elizabeth Warren challenged Trump to set ethics guardrails to control a “massive conflict of interest” posed by Musk’s unofficial role in his transition and incoming administration.

And it wouldn’t be the end of the year without the threat of a US government shutdown. Lawmakers agreed to extend government funding into March, with a bill that includes $100 billion in disaster aid. But House Speaker Mike Johnson’s struggle for a deal is an ominous sign for his party’s ability to push through Trump’s early priorities.

Deep Dive: El Salvador

Nayib Bukele became one of the world’s most popular leaders by helping dismantle El Salvador’s gangs. But economic growth is proving more problematic.

The Big Take

Opinion

Indian food is the best in the world, Tyler Cowen writes. Using his background as an economist, he has a few theories why: Food supply chains are short, its many religions make the cuisine distinctive and geography also plays a role.

Before You Go

Chef Kathy Fang’s family is the force behind House of Nanking, the storied San Francisco restaurant founded by her father. She logs more than 35,000 miles a year traveling the globe and told Bloomberg Pursuits her favorite travel hacks, including her best in-flight beauty secret.

Enjoying Morning Briefing Americas? Get more news and analysis with our regional editions for Asia and Europe. Check out these newsletters, too:

Explore all newsletters at Bloomberg.com.