UBS On-Air: Market Moves

Join the Chief Investment Office for a discussion on the executive order Trump signed over the weekend to impose additional tariffs on imports from Canada, Mexico, and China, the implications for investors, and more. The event is hosted by Amantia Muhedini and features David Lefkowitz, Head of US Equities, Leslie Falconio, Head of Taxable Fixed Income Strategy, and John Savercool, Head of Governmental Affairs US.

Will new tariff policies derail economic momentum in the US? Does gold have further room to rally in 2025? Will the global easing cycle continue to gain traction in 2025? CIO's Belinda Peeters brings you the latest on this week's market themes.

Selected European countries are meeting in Paris to discuss the Russia-Ukraine war. This is not likely to be market moving. Europe has allocated about 14% more money to Ukraine than the US, and countries like Germany do spend military aid on new production rather than using existing stockpiles. However, the sums involved are still economically small, limiting their impact.

The podcast dives into President Trump's recent trade tax announcements and their implications for US consumers. It raises the intriguing question of whether he’s being a protectionist or just a pushover, with market reactions leaning towards the latter. The discussion points out that the delay in implementation could create room for negotiating deals, though so far, they seem to lack real substance. Investors are left skeptical, reflecting on how political polarization affects consumer behavior amidst these uncertain times.

Yesterday’s US consumer price data provoked some unease in bond markets. This is mainly the fault of Federal Reserve Chair Powell—not because Powell’s policies drove inflation higher, but because Powell’s “data dependency” mantra means markets overreact to any data point. Egg prices are not controllable (not even by presidential executive order), but the fact that food price inflation is creeping up may have implications for other policies that are hurting US farmers. Today’s producer price data may show companies anticipating tariffs.

Explore the upcoming US consumer price inflation data and its political implications. The discussion highlights how tariff policies impact public perception, especially regarding food prices. Learn about the Federal Reserve's strategies on interest rates and what that means for financial regulation. Additionally, hear insights on how international investors are reacting to these economic shifts.

US President Trump stated there will be no exceptions to aggressively taxing US buyers of foreign metals (due to start on 4 March, giving time for US companies to plead for exceptions). If there is no retreat, this will reduce US steel consumers’ competitiveness via higher import and domestic costs (if domestic metal producers raise prices under cover of the tariff). Retail consumers are less likely to notice the tax, unless job losses are explicitly linked to it.

Explore the latest on tariffs and their ripple effects on the economy. Delve into the recent jobs report, revealing growth in job creation and wages, despite some unexpected figures. Examine how inflation data could sway Federal Reserve policies. Discover insights into technology stocks and strategies for navigating market uncertainties. This engaging discussion sheds light on the intersection of labor market trends and economic forecasts.

US President Trump (temporarily) retreated from ending de minimis tariff exemptions. De minimis rules mean US consumers do not pay trade taxes on imports worth less than USD 800. This, alongside retreats from taxing Colombian, Mexican, and Canadian goods, emphasizes trade tax visibility. Consumers would notice the cost of these tariffs (affecting food and fuel prices, or the price of purchases from Temu), and would quickly realize that US consumers, not foreigners, pay tariffs. Highly visible tariffs lead to a quick retreat.

In this episode, CIO's Jon Gordon provides an update on Chinese tariffs on the US coming into effect, Fed speak & US AI security policy under President Trump.