US tariffs are top of mind for investors.

US President Donald Trump announced a 25% tariff on auto imports. We expect the US to announce further tariffs on most major trading partners on 2 April. The direct and indirect effect of tariffs will likely feature prominently during the first-quarter earnings season starting in mid-April.

Markets are likely to remain volatile in the near term.

Differing global views on the nature of reciprocal tariffs could lead to a cycle of tit-for-tat escalation in the coming weeks. We estimate that the effect of tariffs would knock around 2 percentage points off 2025 S&P 500 earnings growth in our base case. However, recent comments from Trump also suggest some flexibility in his reciprocal tariff plans. We would expect various deals to be struck to limit their overall breadth and scale.

Investors should utilize volatility to build long-term positions and ensure portfolio diversification.

We believe the US growth and earnings backdrop remains positive, and key structural drivers like AI demand are intact. Investors who are underallocated can take advantage of near-term volatility by phasing into broad US equities and stocks exposed to AI. Beyond equities, investors should consider quality bonds, gold, and hedge funds to help diversify portfolios.

POTUS 47: Investing under Trump 2.0

Q: So, we advise investors to prepare for further bouts of volatility as they position for longer-term gains.

Investors who are underallocated to equities should prepare to add exposure on potential market dips. Potential volatility could be a good opportunity for investors to build exposure to structural growth ideas, including AI, power and resources, and longevity.

Q: President Trump has express dissatisfaction with the pace of Fed rate cuts, and raised the possibility of replacing Chair Powell.

Trump recently blamed the Fed chair for costing the country "hundreds of billions of dollars" by resisting lower rates. Additionally, the president has criticized Powell for the cost of refurbishing the Fed's headquarters. While the president said that removing the Fed chief is "highly unlikely," he also said he didn't "rule out anything."

Q: So, we don't expect the appeal of US Treasuries to be undermined by worries over Fed independence.

With Fed decisions still being guided by economic data, rather than political pressure, we expect rates to come down by 100 basis points by June 2026. This will further erode the value of cash deposits, adding to the appeal of the durable income offered by quality bonds, including US Treasuries—which we expect to retain their role as the linchpin of the global financial system.

Recent updates
Key questions
Podcasts
Livestreams
Featured reports

No deal, but trade talks likely to continue

1 Aug 2025

Switzerland failed to reach a deal with the US. What is the impact on the economy, SNB policy, the Swiss franc, and equities?

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US drug pricing: MFN Letters sent to Pharmaceutical Companies

1 Aug 2025

We discuss President Trump's letters to pharmaceutical companies on MFN drug pricing.

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Trump unveils new tariffs

1 Aug 2025

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Asia tariff deals reaching the finish line

1 Aug 2025

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India to face 25% tariffs and penalties on US exports

31 Jul 2025

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Is Trump’s trade conflict over?

28 Jul 2025

The tariff dispute between the US and its top trading partners appears to be nearing a resolution. Last week, the US concluded agreements with the European Union and Japan, while negotiations appear to be progressing well with China. These developments fit with our longstanding view that cooler heads would prevail in the conflict, averting a spiral of retaliation. But risks remain—the deals struck lack the detail of full trade agreements, and disputes could re-emerge. The Trump administration continues to mull tariffs on specific sectors, such as pharmaceuticals, which could be disruptive. Against this backdrop, we still believe investors should prepare for further bouts of volatility.

Trade tensions between the US and its main partners have eased markedly.

An agreement with the EU concluded over the weekend would cap tariffs on most goods entering the US at 15%, half the level the White House had threatened to impose on 1 August if talks failed.
A similar deal was announced with Japan. Media reports have also suggested that the US and China have agreed to extend their tariff truce for another three months.
So far the risk of an economic destruction cycle of retaliation between the US and its peers looks to have been averted.

While such developments have been in line with our expectations, trade tensions are likely to remain a source of uncertainty, potentially leading to bouts of volatility.

The Trump administration could revisit agreed trade deals and continue to use tariff threats as a negotiating tool.
Various sector-level tariffs are under consideration by the US, which could rekindle the trade conflict.
Markets have already priced in plenty of good news, with the S&P 500 up around 30% from its April lows, making markets potentially vulnerable to any renewed disappointments on trade.

So, we advise investors to prepare for further bouts of volatility as they position for longer-term gains.

Investment view

We expect market upside over the coming 12 months, and greater tariff certainty will help support that. At the same time, after a strong rally and with good news now well-priced, we believe that markets may be vulnerable to volatility in the near term.

Will the threat to Fed independence harm markets?

28 Jul 2025

President Trump has intensified his criticism of Fed Chair Jerome Powell, amid renewed reports that the central bank chief could be removed before the end of his term. A direct challenge to Fed autonomy could add to the risk premium on US Treasuries and undermine confidence in the US dollar. But our view is that the president is unlikely to take this risk. We expect Fed policy to be guided primarily by labor market and inflation data, leading to around 100 basis points of easing by June 2026.

President Trump has express dissatisfaction with the pace of Fed rate cuts, and raised the possibility of replacing Chair Powell.

But the chances of a direct challenge to the Fed's autonomy is unlikely, in our view.

President Trump would, we believe, anticipate a negative market reaction from any move to fire Powell before the end of his term in May 2026—including pushing government borrowing costs higher.
Since Fed policy is set by a committee of 12 voting members, replacing Powell with a more dovish chair alone would not lead to the rapid easing that Trump has called for.
Efforts to dismiss Powell would also likely be rejected by the courts, in our view.

So, we don't expect the appeal of US Treasuries to be undermined by worries over Fed independence.

Investment view

High grade and investment grade bonds offer attractive risk-reward proposition, in our view. We do not expect risks to the Fed's independence to change this. With rates cuts set to resume later in the year, quality fixed income offers a way to lock in attractive yields.

�۶��Ƶ On-Air: Paul Donovan Daily Audio 'The taxation burden descends'

1 Aug 2025

The global economy is reverberating with the dull thud of the yoke of taxation dropping onto the shoulders of US consumers. These taxes do not show up in consumer baskets with full force until January next year—the question is whether the courts will overturn these taxes before then. If they do (forcing the government to return tax revenues to the US supply chain), it is possible US consumers will never fully appreciate the costs.

Top of the Morning: CEO Macro Briefing Book - Insights on taxes

22 Jul 2025

Paul rejoins in-studio to spotlight a special edition of the CEO Macro Briefing Book publication series which covers tax and economic considerations that stem from the One Big Beautiful Bill, for both business owners and individuals. Featured is Paul Hsiao, Asset Allocation Strategist Americas, �۶��Ƶ Chief Investment Office. Host: Daniel Cassidy

Top of the Morning: CIO Strategy Snapshot - Summer slowdown?

21 Jul 2025

Despite relatively low trading volumes and narrow trading ranges as of late, there is still plenty factors top of mind for investors that could stir up market volatility in the weeks ahead. This morning, we check-in on the Q2 earnings season, reflect on Fed independence concerns, and assess macro uncertainty stemming from evolving US trade policy. Plus, a review of CIO’s market outlook and portfolio positioning recommendations. Featured is Jason Draho, Head of Asset Allocation Americas, �۶��Ƶ Chief Investment Office. Host: Daniel Cassidy

Trade update: US-China tariff reductions

CIO Live | Watch the replay of the special edition livestream

13 May 2025

Signs of easing trade tensions between the US and China are lifting global equity markets, following news that both countries have agreed to a 90-day reduction in tariffs. This positive momentum is further supported by last week’s announcement of a new US-UK trade deal framework. While significant challenges remain in securing a lasting US-China agreement—which could contribute to ongoing market volatility—we see attractive opportunities for investors willing to look beyond short-term fluctuations and invest selectively.

To help you navigate these shifting dynamics, CIO held a special edition global livestream with Nadia Lovell, Senior Equity Strategist; Dominic Schnider, Head CIO for Global FX and Commodities; and Paul Hsiao, Asset Allocation Strategist, hosted by Amantia Muhedini, Sustainable & Impact Investing Strategist. In this edition, our experts broke down the latest tariff developments, assessed their impact on markets, and provided actionable strategies for investors.

100 days in: Trump 2.0, tariffs, and the road ahead

100 days in: Trump 2.0, tariffs, and the road ahead

1 May 2025

With ongoing policy shifts driving market volatility, Solita Marcelli, Chief Investment Officer Americas, hosted a special May edition of our House View monthly livestream to discuss topics from the administration's first 100 days and what we can expect going forward. Watch the replay.

Agenda

US trade policy: What’s next from Washington?

Douglas Irwin, Professor of Economics at Dartmouth College and author of Clashing over Commerce: A History of U.S. Trade Policy

Geopolitical impact: A world in transition

Admiral James Stavridis, Vice Chair of Global Affairs at The Carlyle Group and former 16th Supreme Allied Commander at NATO

How to invest: CIO’s macro and market views

Paul Donovan, Chief Economist, �۶��Ƶ Global Wealth Management, and Jason Draho, Head of Asset Allocation, CIO Americas

This interview contains views which originate from outside Chief Investment Office Global Wealth Management (CIO GWM). It is therefore possible that the interview does not reflect the views of CIO GWM.

Special edition livestream: Trade wars

04 Apr 2025

We hosted a special edition livestream to discuss the latest developments on the trade war as the markets continued to digest the effects of tariffs on the US economy. Featured were Kurt Reiman, Head of Fixed Income, CIO Americas and Jason Draho, Head of Asset Allocation, CIO Americas.

Special edition livestream: Tariffs, volatility, and your portfolio

03 Apr 2025

We hosted a special edition of our monthly House View livestream, focused on the latest tariff announcements and the market impact. The conversation featured Jason Draho, Head of Asset Allocation Americas; Kurt Reiman, Head of Fixed Income Americas; David Lefkowitz, Head of US Equities; and Leslie Falconio, Head of Taxable Fixed Income Americas.

Featured reports

Disclaimer

Global asset class preferences definitions

The asset class preferences provide high-level guidance to make investment decisions. The preferences reflect the collective judgement of the members of the House View meeting, primarily based on assessments of expected total returns on liquid, commonly known stock indexes, House View scenarios, and analyst convictions over the next 12 months. Note that the tactical asset allocation (TAA) positioning of our different investment strategies may differ from these views due to factors including portfolio construction, concentration, and borrowing constraints.

Most attractive – We consider this asset class to be among the most attractive. Investors should seek opportunities to add exposure.

Attractive – We consider this asset class to be attractive. Consider opportunities in this asset class.

Neutral – We do not expect outsized returns or losses. Hold longer-term exposure.

Unattractive – We consider this asset class to be unattractive. Consider alternative opportunities.

Least attractive – We consider this asset class to be among the least attractive. Seek more favorable alternative opportunities.

Note: For equities, we have collapsed “Most Attractive” with “Attractive” and “Least Attractive” with “Unattractive” from the five-tier rating system that is found in the Equity Compass into three tiers.

Nontraditional asset classes are alternative investments that include hedge funds, private equity, real estate, and managed futures (collectively, alternative investments). Interests of alternative investment funds are sold only to qualified investors, and only by means of offering documents that include information about the risks, performance and expenses of alternative investment funds, and which clients are urged to read carefully before subscribing and retain. An investment in an alternative investment fund is speculative and involves significant risks. Specifically, these investments (1) are not mutual funds and are not subject to the same regulatory requirements as mutual funds; (2) may have performance that is volatile, and investors may lose all or a substantial amount of their investment; (3) may engage in leverage and other speculative investment practices that may increase the risk of investment loss; (4) are long-term, illiquid investments; there is generally no secondary market for the interests of a fund, and none is expected to develop; (5) interests of alternative investment funds typically will be illiquid and subject to restrictions on transfer; (6) may not be required to provide periodic pricing or valuation information to investors; (7) generally involve complex tax strategies and there may be delays in distributing tax information to investors; (8) are subject to high fees, including management fees and other fees and expenses, all of which will reduce profits.

Interests in alternative investment funds are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other governmental agency. Prospective investors should understand these risks and have the financial ability and willingness to accept them for an extended period of time before making an investment in an alternative investment fund, and should consider an alternative investment fund as a supplement to an overall investment program.

In addition to the risks that apply to alternative investments generally, the following are additional risks related to an investment in these strategies:

Hedge Fund Risk: There are risks specifically associated with investing in hedge funds, which may include risks associated with investing in short sales, options, small-cap stocks, “junk bonds,” derivatives, distressed securities, non-US securities and illiquid investments.
Managed Futures: There are risks specifically associated with investing in managed futures programs. For example, not all managers focus on all strategies at all times, and managed futures strategies may have material directional elements.
Real Estate: There are risks specifically associated with investing in real estate products and real estate investment trusts. They involve risks associated with debt, adverse changes in general economic or local market conditions, changes in governmental, tax, real estate and zoning laws or regulations, risks associated with capital calls and, for some real estate products, the risks associated with the ability to qualify for favorable treatment under the federal tax laws.
Private Equity: There are risks specifically associated with investing in private equity. Capital calls can be made on short notice, and the failure to meet capital calls can result in significant adverse consequences including, but not limited to, a total loss of investment.
Foreign Exchange/Currency Risk: Investors in securities of issuers located outside of the United States should be aware that even for securities denominated in US dollars, changes in the exchange rate between the US dollar and the issuer’s “home” currency can have unexpected effects on the market value and liquidity of those securities. Those securities may also be affected by other risks (such as political, economic or regulatory changes) that may not be readily known to a US investor.

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Investing under Trump 2.0

Recent updates

No deal, but trade talks likely to continue