UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - Don’t call it a comeback
Jul 14, 2025
In this engaging discussion, Jason Draho, Head of Asset Allocation Americas at UBS, shares his insights on the resurgence of tariffs and their implications for the market. He explores the tension between the Fed and political pressures surrounding interest rates. Jason also offers an optimistic view on the upcoming earnings season, highlighting resilience in sectors like tech amid tariff impacts. He delves into the potential for a 'Roaring 20s'-style economic revival, driven by investment and AI, while navigating the challenges of current policy uncertainty.
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Tariffs as Negotiation Tactics
- The recent tariff threats are mainly negotiation tactics with a base expected U.S. tariff rate around 15%.
- Economic data and market conditions currently allow the administration to push tariffs without immediate impact.
Fed Independence Likely Holds
- Despite political pressure, the Fed is likely to maintain a conservative approach and start rate cuts in September.
- Legal barriers make firing Fed Chair Powell complicated, so major changes are unlikely soon.
Earnings Resilience and Tech Strength
- Earnings season is expected to show moderate growth around 4% for Q2, with some upside surprises maintaining market resilience.
- Tech sector earnings may benefit notably from a weaker dollar and foreign revenue gains.