UBS On-Air: Market Moves
Top of the Morning: CIO Strategy Snapshot - Digesting the data and policy
Feb 18, 2025
Jason Draho, Head of Asset Allocation Americas at UBS Chief Investment Office, provides keen insights into current economic data and policy shifts. He analyzes January's inflation trends and disappointing retail sales, unveiling mixed signals in the U.S. economy. The conversation also highlights the intricate federal budget negotiations and their potential impact on market stability. Draho shares key strategies for navigating uncertainty, focusing on the resilience of the S&P 500 and tech sectors, while emphasizing inflation hedges for investors.
20:25
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Quick takeaways
- Recent economic data shows stable inflation trends despite short-term volatility, suggesting a moderate trajectory for the year ahead.
- Equity markets remain resilient amidst political uncertainty, with investors viewing recent developments as noise rather than threats to stability.
Deep dives
Current State of U.S. Inflation
Recent data on U.S. inflation presents a mixed picture, with the January Consumer Price Index (CPI) coming in higher than expected, causing a notable market reaction. While certain categories like motor vehicle insurance and airfares showed significant increases, the overall inflation narrative remains somewhat stable. The shelter component of inflation has been declining, indicating potential disinflationary trends moving forward. Analysts believe that despite some short-term volatility, inflation is not accelerating in a concerning manner, which suggests a more moderate inflation trajectory for the rest of the year.
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