UBS On-Air: Market Moves Top of the Morning: POTUS 47 - Another brick in the tariff wall
Aug 13, 2025
Kurt Reiman, Head of Fixed Income Americas at UBS, joins to provide valuable insights into the latest trade policy changes and their implications on the market. They discuss the potential ramifications of increased tariffs, including expected retaliatory measures from other nations. Kurt highlights concerns over the Federal Reserve's independence amid ongoing inflation and the pressures for interest rate cuts. The conversation also dives into how geopolitical events shape market reactions, particularly in the oil sector, ensuring listeners are equipped with crucial economic perspectives.
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Tariff Wall Is Real But Muted
- The U.S. has built a substantial tariff wall that is higher than at the start of the year, but many exemptions mute headline rates into a mid-teens effective rate.
- Tariffs take time to filter into prices and the economy, so their full inflationary effect may show gradually in coming months.
Wait-And-See Explains Lack Of Retaliation
- Other countries have largely not retaliated so far, possibly because they expect U.S. tariffs to be struck down by the Supreme Court next year.
- That expectation may explain the surprisingly muted global economic backlash to U.S. tariff actions.
Anticipate A Gradual Economic Softening
- Expect tariffs to gradually soften U.S. demand and prompt the Fed toward rate cuts rather than an immediate recession.
- Position for a manageable slowdown, not a deep recession, and watch incoming CPI and labor data for confirmation.