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Hedge Clippings | 19 September 2025
Hedge Clippings - All about the Donald! The US Federal Reserve did what markets had been anticipating - and Donald Trump has been crying out for - cutting rates by 25 bps and flagging that two more are on the way. Trump will claim the credit no doubt, and his new FED appointee Stephen Miren - direct from his day job at the White House - voted against the move, instead arguing for a .50% cut. However, Jerome Powell stuck to his guns, and it went by the numbers, 11-1 in favour of 0.25%. The move came off the back of weaker employment numbers as job growth has slowed, partly due to Trump's immigration policy, and despite stronger inflation, which Powell described as "somewhat elevated". But the complication is tariffs. While Trump won't admit it, his trade barriers are acting as a tax on consumers, pushing up the cost of goods and feeding through to inflation. So, while the Fed is easing with one hand, they're fighting a tariff policy that is tightening the screws with the other. For investors, it's a case of celebrating cheaper money while simultaneously wondering what it says about the health of the US economy - and whether tariff-induced inflation could yet bite harder. Still on Trump, across the Atlantic, the UK was busy polishing the silverware for his visit to Windsor Castle. King Charles, who has seen his fair share of world leaders, rolled out a stunningly lavish welcome. The photo-ops were dutifully staged, but one can't help speculating what was said behind closed doors once the motorcade departed. Did Charles turn to Camilla and mutter, "Thank goodness that's over", or perhaps, "Best to count the cutlery." Sadly, we'll never know. Jokes aside, markets remain in the uncomfortable space between policy and politics. Rate cuts are meant to provide reassurance, but they also underline fragility. Trade barriers are meant to project strength, but they tend to hurt the very economies that impose them, and the people who voted for them. And while royal pageantry makes for colourful headlines, investors would do well to tune out the theatre. As we often say, "let the numbers do the talking". Right now, in the US those numbers point to an uneasy mix: slowing growth, stubborn inflation risks, and the hope that monetary stimulus buys enough time for the economy to adjust. Whether it does so depends less on the pomp at Windsor, and more on how long consumers and businesses can shoulder the contradictions of easy money, and expensive trade. What's next on the local front? Albo's off to New York, where he's hoping to have a more successful time persuading Donald to see his point of view than he did this week while trying to keep PNG and Vanuatu out of the clutches of Beijing. Hopefully (not that hope is a reliable strategy), Trump, fresh from Windsor, will still have his warm and fuzzy side on show. News | Insights New Funds on FundMonitors.com 10k Words | Equitable Investors Australian Equities Reporting Season Update | Airlie Funds Management August 2025 Performance News |
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