UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - Policy & geopolitics
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Jan 20, 2026 In this engaging discussion, Jason Draho, Head of Asset Allocation Americas at UBS, dives into the geopolitical and policy currents shaping markets in early 2026. He tackles President Trump’s Greenland ambitions, assessing the market risks of potential tariffs. Jason also previews crucial announcements from Davos focused on housing and energy. Additionally, he examines the speculation around Fed chair candidates and discusses the implications of Japan's snap election on global rates. His insights provide a nuanced outlook for investors amid these dynamic challenges.
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Geopolitics Raises Uncertainty Risk
- Geopolitical flare-ups like the Greenland episode add downside tail risk via uncertainty more than direct economic impact.
- Markets price a drag from trade tensions even if estimated GDP hits are modest, because uncertainty harms confidence and investment.
Read Davos For Tone Not Full Policy
- Watch the details and tone of President Trump's Davos speech to gauge policy direction rather than expect fully fleshed legislative plans.
- Focus on which measures require executive action versus congressional approval to assess implementability and market impact.
Fed Nominee vs. Bigger Institutional Risks
- Fed chair selection matters politically but may not immediately change policy reaction this year; economic data and market stress will dominate.
- A Supreme Court case over Fed governor removals could ultimately have larger implications for Fed independence than a single appointment.