UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'No cuts for now'
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Jun 25, 2025 Federal Reserve Chair Powell's recent speech highlights a cautious approach to interest rates, emphasizing the impact of trade taxes and future inflation. The podcast dives into how geopolitical tensions, including the ceasefire between Israel and Iran, are affecting market dynamics. There’s also an intriguing discussion on how regional stability and global financial trends interact with local politics, touching on the rising polarization seen worldwide.
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Powell Signals No Quick Rate Cuts
- Fed Chair Powell indicated that US interest rates will not be cut quickly due to inflation concerns.
- Inflation rise is expected as tariffs impact consumer prices, especially in July.
Shift From Data Dependency
- Powell shifts away from purely data-dependent policy toward anticipating future inflation.
- This suggests the rate easing cycle in the US will start slowly and depend on labor market impact.
Markets Focus on Regional Stability
- Financial markets tend to focus on risks to regional stability rather than the failure to end Iran's nuclear program.
- Markets react more to changes in the ceasefire status between Israel and Iran than to long-term solutions.