UBS On-Air: Market Moves

Andrew drops by the studio for an assessment of this week’s July FOMC meeting statement, and Q&A session with Chairman Kevin Warsh. We also discuss the factors behind the market response on Wednesday afternoon, along with CIO’s expectations for monetary policy into year-end, and beyond. Featured is Andrew Dubinsky, US Economist, UBS Chief Investment Office. Host: Daniel Cassidy

The Federal Reserve left interest rates (and the accompanying policy “statement”) unchanged yesterday. Fed Chair Warsh appeared to try and speak to several audiences. US President Trump was told inflation was the fault of the Fed but would come down. Households were told not to assume the Fed would allow higher inflation (most US households do not know the Fed’s job is to control inflation). And markets were told a lot of things.

Burkhard drops by to share his thoughts on the pattern with oil prices and the US-Iran conflict, how this week’s FOMC meeting outcome could set the tone for market direction in the second-half of the year, and whether the investor rotation in equities has further room to run.

Dan rejoins the conversation with Jason to exchange thoughts on how to approach asset allocation in today’s market and macro environment. We also spend time weighing potential directions for US monetary policy, along with geopolitical considerations, and factors that could impact fixed income return throughout the second-half of the year. Featured are Jason Draho, Head of Asset Allocation Americas with the UBS Chief Investment Office, and Dan Ivascyn, Group Chief Investment Officer for PIMCO. Host: Daniel Cassidy

Iran’s missile strikes against US Gulf military bases pushed oil prices modestly higher. It is a reminder of the challenge for investors—Iranians are clearly setting the agenda in the Gulf war, and investors do not know how to analyze the motives of the Iranian military. This constrains investors’ ability to price in plausible scenarios, and leaves little other than the default optimism bias to influence markets.