The week in markets - interest rate fears are vastly exaggerated

The Beyond Markets podcast channel is wrapping up on a high note at the end of 2025. But do not worry! The conversation continues on our podcast Moving Markets by Julius Baer, where we'll be sharing fresh insights and analysis on current market developments.

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In this episode, we discuss about core personal consumption expenditures rising 4.7% year on year in January, higher than both the December reading and economist expectations. Economic data from durable goods orders to pending home sales, from Purchasing Managers indices to consumer sentiment surveys, have all been higher than expected.

Julius Baer economist David Kohl has revised our estimate for US GDP growth this year from 0.9% to 1.9%, and from no more rate hikes, he now expects 25 basis points each in the March and May Fed meetings. Higher rates have an impact on economic activity over time, so our GDP growth estimate for 2024 is revised down from 1.8% to just 0.3%.

Julius Baer CIO Yves Bonzon says that with the US economy in good shape, the bull market that started last October can continue, even if the policy rate gets to 5.25% and stays there for a while. The market is climbing the wall of worry, as it does in every new bull run.

This episode is presented by Mark Matthews Head Research Asia at Julius Baer.