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Market take

Tweaking our views yet staying risk on

Feb 10, 2025
Sharp market volatility this year has been influenced by U.S. policy shifts and breakthroughs in artificial intelligence. Experts discuss how tariffs and inflation are reshaping investment strategies worldwide. The conversation explores the fine balance between adapting tactics and maintaining a risk-on approach in these changing times.
03:24

Podcast summary created with Snipd AI

Quick takeaways

  • U.S. policy shifts and tariffs could lead to higher inflation and lower growth, complicating the Federal Reserve's interest rate strategy.
  • Adjustments in investment strategies prioritize euro area bonds for stability while emerging markets are seen as vulnerable due to tariff impact.

Deep dives

Impact of U.S. Policy and Tariffs on Market Outlook

Recent shifts in U.S. policies and the implementation of tariffs are anticipated to significantly influence market conditions in 2025. The potential introduction of blanket tariffs, alongside increased tariffs on Canada and Mexico, could elevate the U.S. effective tariff rate to levels not seen since the 1930s. This scenario raises concerns about the likelihood of higher inflation coupled with lower growth, impacting the Federal Reserve's ability to reduce interest rates in the near term. As a response to these developments, a focus on risk management is essential while holding a positive outlook for U.S. equities, which may continue to perform well due to resilient growth and strong corporate earnings amid advances in artificial intelligence.

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