UBS On-Air: Market Moves

With the wearisome repetitiveness of a tacky Christmas song, a US government shutdown is again threatened. A budget deal backed by president-elect adviser Musk and President-elect Trump failed to pass Congress. Absent a deal, the US government starts to shut down tonight. A short-lived shutdown affects government workers, but has limited economic impact. The longer a shutdown lasts, the more disruptive it is to the US economy. Economic data may not get published in a shutdown (a problem for Federal Reserve Chair Powell with their addiction to data dependency).

US inflation has fallen this year. A lot of this is due to the fantasy owners’ equivalent rent price, which no one pays. Declining fantasy prices do not help consumers’ spending power. However, rightly or wrongly (the answer is “wrongly”), Fed Chair Powell pays attention to inflation measures including OER. If rates were raised on a fantasy, they should be cut on a fantasy—and we see a rate cut today.

For the final episode of 2024, Shane shares the latest on government funding negotiations, along with other year-end legislative priorities of Congress. We also touch on recent developments within Syria, along with highlight some notable priorities of Congress in the new year. Featured is Shane Lieberman, Senior Governmental Affairs Advisors, Governmental Affairs US. Host: Daniel Cassidy

US inflation has fallen this year. A lot of this is due to the fantasy owners’ equivalent rent price, which no one pays. Declining fantasy prices do not help consumers’ spending power. However, rightly or wrongly (the answer is “wrongly”), Fed Chair Powell pays attention to inflation measures including OER. If rates were raised on a fantasy, they should be cut on a fantasy—and we see a rate cut today.

Torsten rejoins Jason in the New York podcast studio to exchange 2024 reflections, and 2025 expectations - spanning market returns, monetary policy, and the macro environment for the US, and around the world. We also spend time addressing investment themes, and allocation preferences as we head into a new year. Featured are Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office, and Torsten Slok, Partner and Chief Economist with Apollo Global Management. Host: Daniel Cassidy

We wrap up our year-ahead series with a look at expectations for the municipal bond market in 2025, including how policy uncertainties and macro factors might impact munis, along with how investors should assess key trends and position within the asset class. Featured are Sudip Mukherjee, Senior Municipal Strategist Americas, Ted Galgano, Senior Municipal Credit Strategist Americas, & Jeannine Lennon, Senior Municipal Credit Strategist, UBS Chief Investment Office. Host: Daniel Cassidy

While we wait for the perfection of economists running everything, politicians are creating background noise. To the surprise of absolutely no one, Germany’s government lost a vote of confidence and February elections are now likely. Expect deep soul-searching about relatively insignificant changes in fiscal deficits.

As we conclude the CIO Strategy Snapshot series for 2024, Jason unveils and explains his choice for 2024 “finance word of the year”. We also spend time reflecting the latest round of inflation data, previewing this week’s FOMC meeting, and reviewing CIO’s investment recommendations heading into 2025. The CIO Strategy Snapshot will resume on Monday, January 6. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

China’s November retail sales disappointed. Some of this can be blamed on the timing of the singles shopping festival. The pattern of sales showed consumers spending in areas with government support, but in doing so cut back on areas without government support. This demand switching in an overall subdued demand environment has parallels to Japan’s “spending voucher” initiatives in the 1990s. The data keeps up pressure for fiscal policy to tackle consumers’ apprehensions about the future.

The decade so far has been a “Roaring ‘20s” by many measures. Now we’re getting set to navigate geopolitical uncertainty, lower interest rates, and transformative innovation in the years ahead. As we approach the midpoint of the decade, a key question is whether US political change might extend or end this “Roaring ‘20s” dynamic. To help you start the new year with confidence, Jason Draho, Head of Asset Allocation, and Kurt Reiman, Head of Fixed Income, will outline top ideas for 2025, share key investment insights, and provide strategies for achieving long-term investment success. Recorded on December 5th.