UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - Jackson Hole takeaways
Aug 26, 2025
In this discussion with Jason Draho, Head of Asset Allocation for the Americas at UBS, listeners gain insights from the Jackson Hole Symposium and Fed Chair Powell's impactful speech. Jason elaborates on potential shifts in monetary policy and what they could mean for interest rates. He also highlights recent trends in the S&P 500, including the surge in small-cap stocks and sector rotations. Additionally, he shares the latest asset allocation recommendations, emphasizing a positive outlook for equities and strategic investment opportunities.
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Powell's Nuanced Dovish Signal
- Powell's language signaled a possible shift toward cuts without committing, which markets read as dovish.
- That nuance raised September cut odds materially but left room for data to change the outcome.
Curious Labor Market Balance
- Powell highlighted a peculiar labor market balance: both supply and demand for workers have slowed.
- That mix complicates the Fed's dual mandate and may tilt emphasis toward employment when setting policy.
Strategy Review Versus People
- The Fed's review removed 'average' from its long-run strategy but kept a 2% focus and flexible approach.
- Future policy shifts will likely hinge more on Committee membership changes than the strategy wording itself.