UBS On-Air: Market Moves

US monetary policy is in focus, with Federal Reserve Chair Warsh refusing to give forward guidance on policy at the IMF meetings—then giving forward guidance of a sort. Warsh failed to sound hawkish. The word of Warsh carries relatively little weight, but this chimes with Fed President William’s earlier remarks. Expectations for an October rate increase are fading.

On this week’s episode, Burkhard acknowledges the fourth anniversary of the current bull market and weighs whether equities have further room to run, mindful of the impacts to the recent increase in the cost of capital. Burkhard also underscores the importance of corporate earnings to the health of an economy.

The US inflation print underscored some established trends. While consumer price inflation has a large fantasy component to it, it seems fairly clear that real incomes have stagnated since January 2025. That means that increases in spending depend on people getting side-hustle employment, being willing to cut savings rates, or being prepared to use their stock of savings. Today’s retail sales data is another signal of how willing consumers are to utilize savings.

Steve joins Jason for a wide-ranging conversation which spans the US macroeconomic environment, equity market performance, the AI capex cycle, Fed monetary policy, and market risk considerations. Plus, an exchange of views on portfolio positioning. Steve Chiavarone is Chief Investment Officer for Global Equities at Federated Hermes, and is a member of the UBS Research Advisory Board. Jason Draho is Head of Asset Allocation Americas with the UBS Chief Investment Office. Host: Daniel Cassidy

China’s September inflation data was not especially exciting. Food prices kept the consumer price inflation figures moderate (food is nearly 30% of China’s consumer price basket). China is not a noted food exporter, so this has little global bearing. China’s consumers are not responding to low inflation with much enthusiasm.