Uncertainty Surrounds Jay Powell & US Trade

19 snips

Jul 21, 2025

Guest

Frank Lee

Lori Calvasina, head of US Equity Strategy at RBC Capital Markets, shares insights on S&P 500 forecasts amid Fed uncertainty. Bob Michele, CIO at JPMorgan, discusses the potential impacts of tariffs on US companies and speculates on the future of Fed Chair Jay Powell. Meanwhile, Frank Lee, a semiconductor expert, explores the booming AI investment landscape and the complex dynamics of the global semiconductor market. Together, they tackle the evolving challenges in the equity market, monetary policy, and technology's role in shaping economic growth.

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INSIGHT

Market Cautious Amid Policy Uncertainty

Investors are cautious due to policy and tariff uncertainties despite a resilient consumer.
Market expects rate cuts, but pushed back cuts might cause short-term market anxiety.

INSIGHT

Tariffs' Hidden Inflation Impact

Tariffs will likely increase and have inflationary impacts, despite market complacency.
Earnings could be impaired next year due to delayed tariff effects, resembling 2018-2019 patterns.

INSIGHT

Small Caps Face Challenges

Small-cap stocks may underperform short-term due to economic sluggishness and tariff challenges.
Investors seeking economic tailwinds are cautious given modest GDP and manufacturing growth.

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Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyJuly 21st, 2025
Featuring:
1) Lori Calvasina, Head of US Equity Strategy at RBC Capital Markets, discusses her S&P 500 target and whether equity markets will continue to push through policy and Fed uncertainty. It also comes amid European Union envoys getting ready to meet to formulate a plan for measures to respond to a possible no-deal scenario with US President Trump. The US is now seen to want a near-universal tariff on EU goods higher than 10%, with limited exemptions, according to people familiar with the matter.
2) Bob Michele, CIO: Fixed Income at JPMorgan Asset Management, talks about whether the Fed's right to keep monetary policy unchanged and what the full impact of tariffs will be on US companies. Meanwhile, a new theory from Wall Street is zeroing in on a possible dismissal of Fed Chair Jay Powell. The theory behind this "macro trade" is that a new Fed chair would be more likely to fall in line with Trump's lobbying for lower interest rates, pushing down short-term yields and driving yields on long-term debt higher.
3) Frank Lee, Global Head of Tech Hardware and Semiconductor Research, talks about AI investment, the outlook for semiconductors, and the sustainability of CapEx growth for AI hyperscalers.
4) Jordan Rochester, Head: FICC Macro Strategy EMEA, joins to discuss the dollar-yen trade after the Japanese Prime Minister's election setback this weekend. Japanese Prime Minister Shigeru Ishiba says he must fulfill his responsibility to the nation and its people as the biggest party in parliament. Ishiba raised the US trade talks, inflation, and security environment as pressing issues that must not be left to stagnate due to political instability.
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including WSJ's story on Amazon quietly raised prices on low-cost products since President Trump's tariff announcement, as well as Business Insider's story on the 'Gen Z stare.'

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