UBS On-Air: Market Moves

The end of Jerome Powell’s term as Fed chair brings a shift in US monetary policy, with a divided committee and new leadership on the horizon. We break down what the Fed transition means for interest rates, the outlook for further cuts, and how incoming chair Warsh’s views on AI, the Fed’s balance sheet, and inflation targets could shape fixed income markets. Tune in at the start of the trading week for this regular market outlook from Ulrike Hoffmann-Burchardi, Chief Investment Officer Americas and Global Head of Equities.

Andrew Dubinsky, Senior US Economist, joins to reflect on this week’s FOMC meeting and the likely final press conference held by Chairman Jerome Powell. We also discuss what a Kevin Warsh-led Fed might look like, along with outline expectations for monetary policy through the balance of the year. Plus, a health check on US economic activity. Host: Daniel Cassidy

US President Trump vowed to keep the (US) Hormuz blockade, declaring the Iranian economy was “crashing,” which would force negotiations. Investors are more inclined to look at the state of the US economy as determining how the situation evolves. In the Wile E Coyote scenario, the US is off the edge of the cliff but happily running on thin air. Thursday’s data showed household savings rates have fallen from 5.1% to 3.6% of disposable income during this administration, which is how consumers afford the affordability crisis. This decline can sustain consumption for some time, but not indefinitely.

On this episode of Viewpoints, Burkhard reflects on the factors that are contributing to global equity markets grinding higher, despite continued uncertainty stemming from geopolitics. We also touch on what investors should make of crude oil prices being once again on the rise, and assess how today’s market environment compares to that of the 1990s.

Despite King Charles reassuring US members of Congress that there was no “rearguard action” to re-establish control, the Federal Reserve has acquired a distinctly British accent. Four dissents (in two directions) is a straightforward Bank of England imitation (economics is always more convincing in a British accent). Fed Chair Powell pledged to remain in office as a governor.