UBS On-Air: Market Moves How should I be positioned? with Dr. David Kelly (JPMorgan Asset Management) and Jason Draho (UBS CIO)
Nov 6, 2025
In this enlightening discussion, Dr. David Kelly, Chief Global Strategist at J.P. Morgan, and Jason Draho, Head of Asset Allocation for the Americas at UBS, dive into the resilient U.S. economy, predicting 2% growth and inflation. They dissect the impact of tariffs on inflation and explore the Fed's tricky position on interest rate cuts, warning of potential asset bubbles. The conversation also touches on the transformative power of AI, the strategic advantages of international equities, and gold's role as a diversification tool.
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A Resilient, Slow-Moving U.S. Economy
- David Kelly describes the U.S. economy in 2025 as resilient and slowly forward-moving like a healthy tortoise.
- He expects ~2% growth and ~2% inflation, with unemployment around 4%, avoiding recession but with modest cyclical swings.
Tariffs And Refunds Could Lift Mid‑2026 Inflation
- Kelly expects tariff-driven inflation to show through gradually, with consumer prices peaking around mid-2026 as retailers begin passing costs on.
- He cites large upcoming tax refunds boosting spending early next year, amplifying the inflation impulse through mid-year.
Fed Cuts Could Inflate Asset Bubbles
- Kelly argues the Fed may cut rates toward their stated neutral rate partly due to political pressure and perceived room to ease.
- He warns that cutting to lower rates risks feeding asset bubbles rather than boosting real economic activity.