UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - Where to from here?
Aug 4, 2025
Jason Draho, Head of Asset Allocation Americas at UBS Chief Investment Office, joins to discuss the recent selloff in US equities and what this means for investors. He analyzes the disappointing July jobs report and its implications for the labor market. The conversation dives into the Federal Reserve's decision to hold interest rates steady and its impact on market stability. Draho emphasizes the potential for ongoing volatility and encourages investors to focus on medium-term opportunities, particularly in the AI sector.
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Weakness in July Payrolls
- July's payrolls rose by 73,000, below expectations, with significant downward revisions for May and June jobs.
- The labor market shows weakness and raises concerns about the quality of economic data going forward.
Fed Signals Rate Cuts, Adds Uncertainty
- The Fed held rates but signaled downside risks, shifting market expectations toward rate cuts.
- Resignation of Fed Governor Kugler adds uncertainty about future policy and timing of leadership change.
Trade Tariffs Likely Remain Elevated
- Tariff rates rose for countries without new trade deals, pushing effective U.S. tariffs closer to 15%.
- The path will be bumpy with some potential negotiations but tariffs likely remain elevated until economic conditions worsen.