UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Domestic demand drivers'
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Aug 6, 2025 The podcast dives into the shortlist for the next US Federal Reserve governor, questioning the candidates' political independence. It highlights how trade taxes affect US importers and discusses the significance of European retail data in global trade. The focus then shifts to Europe, where domestic demand emerges as a key driver of economic growth amid declining German factory orders and Japan's wage increases. These trends offer insights into consumer spending and hint at possible central bank actions.
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Fed Governor's Political Independence
- The next US Federal Reserve Governor likely won't be perceived as politically independent like previous chairs.
- Their political ties might cause internal Fed resistance against following their lead.
Import Taxes Increase Trade Complexity
- Increased layers of import taxes complicate the trade process, raising costs and bureaucracy for US importers.
- Uncertainty about the legality of some taxes further hampers efficient import planning.
European Domestic Demand Drives Growth
- European domestic demand is a crucial factor for the region's economic growth outlook in 2024.
- Despite a drag from reduced goods spending, consensus expects some growth in June retail sales.