Stewart Smith

The main equity market has had a difficult start to the year, led by the US, mainly due to the uncertainty surrounding US economic policy, in particular the level and impact of US trade tariffs and any retaliatory action. This is likely to remain a focus for most markets, including fixed income markets, until there is a greater degree of clarity.

Tariffs, and their potential impact on inflation, are influencing central bank interest rate policy. Most of the major central banks, with the exception of Japan, would like to cut rates but there is uncertainty as to how many cuts they can make given the economic backdrop. As a result, we are maintaining current portfolio positioning due to significant policy uncertainty.

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