Powell, Tariffs, and Market Tensions

Edmond de Rothschild’s Market Flash dated July 18, 2025, analyses the macro and market implications of renewed U.S. monetary policy debate, inflation risks, and diverging global growth signals.

• Fed under political pressure: Calls for a rate cut clash with Powell’s inflation caution, as tariffs are expected to push U.S. CPI above 3% by year-end.

• Equity and credit diverge: Equity markets remain cautious on valuation, while credit spreads tighten amid stable default rates and strong earnings from U.S. banks.

• Growth outlook splits globally: Resilience in U.S. consumption contrasts with sluggish retail and investment trends in China and mixed signals in Europe.

How should investors weigh political uncertainty against resilient data? The full report explores implications across asset classes and regions.