UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Adding uncertainty in uncertain times'
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Sep 24, 2025 Recent macro uncertainty has shaken investor confidence, fueled by President Trump's comments on Ukraine and Russia, which pushed oil prices higher. Fed Chair Powell's signals indicate that rate cuts are not guaranteed, highlighting shifting risks around inflation and unemployment. Additionally, Trump’s support for Argentina sparked a rally in its assets, though the host emphasizes that verbal reassurances often fail to address deeper issues. Today’s focus includes key German and US economic data amidst this backdrop of caution.
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Single Statements Can Add Market Risk
- Geopolitical remarks can quickly add macro uncertainty and lift commodity prices like oil.
- Markets often mute reactions to single statements and avoid overreacting to one-off comments.
Fed Signals Add Policy Uncertainty
- Jerome Powell signalled that rate cuts are not on autopilot and highlighted upside inflation and unemployment risks.
- That shift adds uncertainty because Fed deliberations may not prioritise unemployment over inflation as previously assumed.
Mixed Fed Messaging Persists
- Fed speakers expressed differing emphases between inflation and employment, and they were inconsistent among themselves.
- In practice, the Fed is still likely to keep cutting, but signalling has become less uniform.