UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'In what can we trust?'
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Aug 21, 2025 The podcast dives into the critical relationship between trust and the Federal Reserve's independence, especially amidst political pressure. Discussion highlights the importance of jobless claims data for gauging the labor market's health. It also scrutinizes sentiment polls, warning against taking results at face value. Furthermore, the UK's surprising growth within the G7 is noted, along with the impact of fiscal policy on public sector borrowing. Each topic underscores the importance of maintaining trust in economic systems as a key factor for stability.
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Fed Sees Inflation As Bigger Risk
- The Fed minutes showed most members viewed inflation risks as larger than employment risks.
- That view matches the rate decision and emerging trade-tax effects.
Independence Shapes Currency Trust
- Political comments risk undermining central bank independence and market trust.
- In a fiat system, even the appearance of reduced independence can threaten the dollar's reserve role.
Trust Is The Foundation Of Fiat Money
- Trust underpins fiat currency credibility and reserve status.
- Eroding trust in the Fed or data makes the dollar more vulnerable globally.