United States
Trump’s firing of Fed Governor Cook raises Fed-independence risks, reinforcing steepener trades. The announcement, aimed at expanding presidential control over the central bank, saw equities fall and bonds initially rally on the prospect of more cuts…
Powell’s Jackson Hole speech was misread, and points to cautious dovishness. Some commentators called it hawkish, others suggested the Fed abandoned its 2% target. Neither is accurate. Central bank communication is rarely binary; it operates across…
The post-Liberation Day rally has broadened, reducing skepticism and strengthening the case for US outperformance versus Europe. The S&P 500’s climb to all-time highs has been unusually smooth, compressing realized volatility and pulling the VIX…
Our Global Investment strategists caution that AI’s economic impact remains limited, and investor patience may wane before fundamentals catch up to valuations. While AI has dominated equity narratives in recent years, its tangible effect on the US…
Powell’s final Jackson Hole speech signaled a dovish tilt, opening the door to a September cut. The Fed is under pressure to balance unemployment and inflation risks, with the FOMC split between “proactive” doves and “reactive” hawks. Recent data have not…
The AI boom has had less of an impact on the economy than widely believed. This may eventually change, but the risk is that investors grow impatient before it does.
The Philly Fed’s August dip confirms persistent US manufacturing weakness and sends a disinflationary impulse. The index fell to -0.3 from 15.9 in July, with shipments, employment, and new orders all declining, the latter slipping into contraction.…
FOMC minutes showed broad support to hold in July, but the committee remains divided between proactive doves and reactive hawks. “Almost all members” favored leaving the funds rate unchanged, though two dissented for an immediate 25 bps cut. Doves want…
US housing data remain weak, reinforcing a fragile growth backdrop and the need for equity downside protection. July housing starts rose 5.2% m/m (annualized), but building permits fell 2.8% following a small June decline. The August NAHB Housing Market…
Trade tensions briefly broke the USD-rates link, but the dollar will remain a countercyclical currency for the near future. A key 2025 trend has been USD depreciation, driven by foreign investors reducing exposure to US assets. At the peak of stress,…