

Top of the Morning: CIO Strategy Snapshot - Navigating geopolitical & policy risk
Jun 16, 2025
Join Jason Draho, Head of Asset Allocation Americas at UBS, as he delves into the complex web of geopolitical tensions, particularly the Israel-Iran conflict and its ripple effects on oil prices and global markets. He discusses key upcoming events, like the G-7 summit, and their potential market impact. Draho also examines the Federal Reserve's cautious stance on interest rates amidst inflation concerns and offers insights into investment strategies, emphasizing the importance of diversification and gold as a hedge in uncertain times.
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Middle East Conflict and Markets
- The market mostly sees Middle East conflict as a geopolitical risk premium, not an immediate economic threat.
- Oil prices rose due to fear of supply disruption, but actual oil exports remain stable so far.
G7 Summit Uncertainty
- The G7 summit outcome is uncertain and could either ease tensions or escalate trade and geopolitical conflicts.
- Markets would welcome a status quo or progress on trade deals, but anticipate risks of disagreement especially on Iran or Ukraine.
Fed Outlook on Rates and Cuts
- The Fed is expected to hold rates steady but may signal fewer cuts this year based on evolving inflation and trade developments.
- Markets price in potential cuts later in the year, but shorter-term Fed statements and projections will be closely watched for shifts.