UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'A US day today'
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Sep 25, 2025 The podcast dives into the revised second quarter GDP data, highlighting potential changes due to unreliable data. It explores how inventory and trade fluctuations skewed growth perceptions between the first and second quarters. Additionally, attention is given to the significance of August wholesale inventories and the impact of pre-tariff stockpiling on prices. Discussions also touch on international trade, particularly the US's support for Argentina's soybean exports, and the implications for the Fed's economic outlook and policy debates.
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Annualisation Distorts Quarter Comparisons
- US Q2 GDP revision likely won't change headline but details will because data quality is poor.
- Annualisation exaggerates Q1 weakness and Q2 strength, so averaging both quarters shows truer momentum.
Inventory Swings Drove Q2 Volatility
- Q2 US growth was driven by big swings in net exports and inventory adjustments around tariff anticipation.
- Averaging Q1 and Q2 gives a better read on momentum than either quarter alone.
Check Wholesale Inventories Timing
- Glance at wholesale inventories data because sector timing altered GDP contributions this year.
- Use inventory timing to gauge when tariff-driven price pressures will appear.