The debt topic is moving rapidly back into the spotlight.

In the US, the tariff saga has entered a new phase: courts ruled that a large portion of tariffs imposed this year may have been illegal. If confirmed, this could force Washington to repay billions already collected – just as the government struggles with an already stretched budget and the “Big Beautiful Bill”.

In Europe, fiscal concerns are flaring up again. France’s rising debt is putting renewed pressure on its fragile credit outlook. Across the Channel, the UK budget debate is intensifying, with crucial decisions expected by the end of November.

Markets: long-dated bonds under pressure

• Yields on 30-year bonds in the US, UK, Japan and Europe have surged, with Japanese bonds hitting a record high

• Gold reaches new record level trading at USD 3,550/oz

• Volatility Index (VIX) slightly up in the recent days

My View: Debt and tariff clouds are building on the horizon. This could be a classic “calm before the storm” setup. Unease is growing around both fiscal and monetary policy paths in several major economies.

Markets tend to ignore structural issues, until they can’t. A renewed focus on sovereign debt sustainability or the legal consequences of potential US tariff repayments could quickly shift sentiment and unleash significant turmoil across global markets.

Seasonality adds another layer: September is historically the weakest month for equities. Whether this year will follow the pattern remains to be seen, but the ingredients for volatility are clearly in place.

The debt topic is moving rapidly back into the spotlight.

In the US, the tariff saga has entered a new phase: courts ruled that a large portion of tariffs imposed this year may have been illegal. If confirmed, this could force Washington to repay billions already collected – just as the government struggles with an already stretched budget and the “Big Beautiful Bill”.

In Europe, fiscal concerns are flaring up again. France’s rising debt is putting renewed pressure on its fragile credit outlook. Across the Channel, the UK budget debate is intensifying, with crucial decisions expected by the end of November.

Markets: long-dated bonds under pressure

• Yields on 30-year bonds in the US, UK, Japan and Europe have surged, with Japanese bonds hitting a record high

• Gold reaches new record level trading at USD 3,550/oz

• Volatility Index (VIX) slightly up in the recent days

My View: Debt and tariff clouds are building on the horizon. This could be a classic “calm before the storm” setup. Unease is growing around both fiscal and monetary policy paths in several major economies.

Markets tend to ignore structural issues, until they can’t. A renewed focus on sovereign debt sustainability or the legal consequences of potential US tariff repayments could quickly shift sentiment and unleash significant turmoil across global markets.

Seasonality adds another layer: September is historically the weakest month for equities. Whether this year will follow the pattern remains to be seen, but the ingredients for volatility are clearly in place.

Late Friday, after market close, the US Court of Appeals for the Federal Circuit ruled that most of the tariffs initiated under former President Trump were unlawful. The decision covered “reciprocal” tariffs on several countries, including China, Canada, and Mexico, as well as duties tied to fentanyl trafficking.

The court found that these measures represented an overreach of presidential authority. However, the ruling allows the tariffs to remain in place until October 14, providing the Trump administration with time to appeal the case to the US Supreme Court.

Markets: US markets closed for Labor Day on Monday

• Gold reaches new record level trading at USD 3,470/oz

• US dollar down

My View: After Fed saga comes the tariff saga. The US has entered a new chapter in its ongoing trade tensions. At first sight, the ruling could be seen as supportive for equities, suggesting that a rollback of tariffs may ease costs for businesses and consumers.
However, the situation remains highly uncertain. The Trump administration still has time to appeal, and the ultimate outcome will likely drag on for weeks or months.

For corporates, this uncertainty makes planning strategies difficult as well as for investors. While reduced tariffs could eventually prove supportive for global trade and corporate earnings, the near-term outlook is clouded by legal and political risk.

I see no reason at this stage to adjust allocations. The ETFMandate portfolio strategy remains on hold, not increasing the equity exposure yet, staying disciplined while monitoring how the legal and political process unfolds.

Yesterday’s economic figures released showed a robust growth for the US economy in Q2, expanding at an annualized rate of 3.3%.
Today on the inflation front, the Core PCE price index, the Federal Reserve’s preferred gauge, ticked up to 2.9% YoY, slightly higher than the prior 2.8% and exactly in line with expectations.
The latest job market figures came in broadly stable, pointing to a still solid labor backdrop, after the recent summer weakness.

Markets: Markets did not react on the figures by the reales. After the opening the picture changes a bit

• Nasdaq down 0.4%

• US 10-year yield higher at 4.24%

• US dollar falling with USD/CHF trading below 0.80

• Gold up 0.6% at USD 3,438/oz

My View: Markets have already priced in a September rate cut. Even Fed Chairman Jerome Powell signaled the possibility of an easing move at the Jackson Hole meeting last Friday. Due to political pressure?
But the Fed is now facing a delicate balancing act. Growth remains strong, inflation shows no meaningful progress toward the 2% target, and Core PCE just moved higher again.

Followers of ETFMandate Market Insights know that I have repeatedly raised doubts: is there truly a fundamental case for easing policy right now?

Adding to this, the US money supply (M2) is already expanding again without any easing measures. Cutting rates into a growing economy with sticky inflation risks fueling new imbalances, from speculative excess in financial markets to renewed upward pressure on prices.

In my view, the market is running ahead of reality, betting on easier monetary conditions rather than acknowledging the data as it stands. For investors, this disconnect between expectations and fundamentals is a clear warning signal.

If the Fed resists both political pressure and market demands, and remains on hold, the current “rate-cut optimism rally”could lose momentum quickly.

Nvidia will release its quarterly earnings today after the market close. The stock trades near record highs, supported by strong momentum in AI-related names.

Markets: Nvidia shares trade close to all-time highs. AI-related stocks broadly benefit from the same momentum.

My View: Nvidia’s earnings today represent a major catalyst not only for the stock itself but also for the AI-heavy and tech-focused sectors. Current investor sentiment is clearly bullish, is also favored by the speculative investors, as reflected by the share price trading near record levels. This, however, increases the risk of disappointment.

The most important factor will not just be the headline numbers, but the guidance: Forward sentiment from management, Spending trends in AI infrastructure, Margin outlook and sustainability of current demand AI demand signals, especially from data centers and cloud infrastructure.

Who follows ETFMandate Market Insights knows that I remain rather cautious on the AI sector. Valuations have reached stretched levels, and I see characteristics of a potential bubble. While Nvidia might still deliver strong numbers, the expectations are extremely high. Any hint of slowing demand, weaker margins, or reduced investment appetite could trigger a sharp reaction – not only in Nvidia, but across the entire AI universe.

The outcome may very well shape the tone of the stock market into the end of August.

President Trump has fired Fed Governor Lisa Cook. In a letter posted on Truth Social, he stated that he had found “sufficient cause” to terminate her “immediately.” Cook, however, responded that Trump “has no authority to do so” since “no cause exists under the law.” The move adds another chapter to the growing tensions between the White House and the Federal Reserve.

Markets: immediately cheered the news

• 10-year US Treasury yield returned to the 4.30% level

• US dollar weakened

• Gold price is climbing

My View: The question is how long the Fed can maintain its independence. Trump has been trying for months to exert influence, pressing for lower interest rates to offset the economic drag from tariffs and to reduce debt-servicing costs.
Higher rates mean higher mortgage payments, leaving consumers with less disposable income. Consumption accounts for roughly two-thirds of US GDP. The ongoing political pressure on the Fed therefore not only threatens institutional independence, but also highlights the delicate balance between monetary policy, politics, and economic growth.

A risk that shouldn’t be ignored: major foreign Treasury holders may lose confidence in Fed independence. If countries like China or Japan were to reduce their holdings, US yields could spike abruptly. We briefly saw such dynamics play out during one night in April this year. A repeat of that scenario could put both markets and the US administration under severe pressure.

In his Jackson Hole speech, Fed Chair Jerome Powell struck a careful balance: he acknowledged inflation risks remain tilted to the upside while pointing out that employment is showing signs of weakness. Importantly, he also opened the door to a potential rate cut in September.

Markets: immediately cheered the news

• Nasdaq +1.5%

• US 10-year yield down to 4.25%

• US small & mid-caps +4%

• US dollar stronger

• Gold +1%

My View: Powell’s message feels like a tactical move, aimed at buying time and easing political pressure on both the Fed and himself. He essentially echoed what markets wanted to hear, and what Donald Trump has been demanding for months.

However, if inflation continues to rise, I have some doubts that a September rate cut will materialize. The upcoming inflation data on Friday will be decisive and must be watched very closely.

For now, I remain cautious. While markets are cheering, the underlying risk of stagflation is real and increasingly probable. It seems that some investors start to look from the same angle today as US Futures give up some gains from Friday.

Jerome Powell speaks today at 16:00 CET at Jackson Hole.

Markets largely are pricing ing a 25 bps cut for September. Some investors even speculate about 50 bps despite recent inflation firming and no clear deterioration in jobs.

Markets: wait and see stance with US rates showing an upside tilt

• US 10-year Treasury yield is drifting higher, trading at 4.34%

• US dollar stopped the recent downtrend with a light uptick.

• US equity futures almost unchanged today

My View: I do not share the market’s consensus dovish baseline. With Jerome Powell leading, the Fed is unlikely to loosen prematurely, even with the current political pressure from the White House.

Based on current available data, I rather expect the Fed to stay on hold for September. This keeps a light upward pressure on yields in the near-term, validating my decision to close tactical long-bond positions.

I’m monitoring closely the USD/CHF: further yield upside could lift the dollar. If that materializes, I’m inclined to close or partially close the USD hedge against the Swiss franc.

The Fed’s Beige Book will be released tonight, providing an updated snapshot of regional economic activity and inflation pressures.

Later this week, the attention is shifting toward the Jackson Hole Symposium, where Fed Chair Powell could set the tone for monetary policy into autumn.

The market is currently pricing in a rate cut of 25bps for September. Investors even start to bet on a 50bps decrease, led by political pressure, despite higher inflation figures.

Markets: US long-term yields moved higher during recent days

• US yields now trading at 4.29%

My View: Risk for market disappointment is elevated with Fed emphasizes persistence of inflation pressures and signals less willingness to ease quickly, which could push yields higher and weigh on risk assets.
With expectations of cuts already priced in, any hawkish surprise carries more downside than upside.

I stay cautious, avoiding chasing stretched equity rallies and keeping liquidity ready for opportunities.

Overbought indicators, seasonal patterns, and increasingly weaker follow-through buying near the highs point to fading momentum.

Markets: rally runs out of steam

• US Futures are trading in negative territory

• US 10 year Treasury yield remain above 4.3%

• US dollar moving sideways

• Gold continue to trade within its range, now at USD 3’325/oz

• Cryptos are joining the consolidation/correction pattern

My View: In recent days, the signals for a possible correction have been mounting. Momentum is clearly fading, and the key question is whether this represents a healthy consolidation or the early stages of a correction.

• A consolidation phase could be constructive, helping reset valuations and sentiment, and creating room for a continued rally should buyers step back in.

• However, catalysts for further equity gains are missing: the earnings season is largely behind us, economic data remain mixed, and central banks are in wait-and-see mode.

With multiple warning lights flashing, this environment calls for patience and discipline. I prefer to avoid chasing stretched rallies, keep liquidity available for better entry points, until new positive triggers emerge.

US producer prices surged in July, with the PPI up 0.9% month-on-month (forecast: 0.2%). It marks the strongest monthly rise since 2022. The annual PPI reached 3.3%, the highest level since February.

Import prices also moved higher, up 0.4% in July after a downwardly revised -0.1% in June. Forecasts expected no change. Although tariffs are excluded, the data suggest exporting countries are unwilling to absorb the extra costs, passing them on instead.

Consumer sentiment in the US deteriorated for the first time since April. The University of Michigan index fell to 58.6 in August (July: 61.7, est.: 62). Inflation expectations rose, and households reported much worse buying conditions for durable goods.

Markets: slowly change to profit taking

• US equities slightly negative after reaching new all-time highs

• US yields moving higher with the 10-year Treasury above 4.3%

• US dollar continues to weaken

My View: The data mix is an explosive cocktail: rising producer and import prices paired with weakening consumer sentiment. Tariffs are beginning to seep into inflation metrics, and higher costs are now visible in wholesale and import data. At the same time, households feel the squeeze, reflected in the sharp decline in sentiment and buying conditions.

Markets are still hoping that rate cuts will shield the economy, with September expectations leaning toward a 25 bps cut, and even chatter of 50 bps. But such aggressive easing would not be a sign of strength—it would confirm underlying weakness.

For now, the contradiction persists: inflation is heating up while consumer sentiment turns down. Investors should not ignore the risks. The cocktail of tariffs, higher prices, and weakening demand could quickly undermine the current optimism in risk assets.

The July consumer price index came in largely benign. Headline inflation rose 2.7% year-over-year, slightly below the estimate of 2.8%. On a monthly basis, CPI advanced 0.2%, in line with expectations.

The more closely watched Core CPI (ex food and energy) surprised to the upside. At 3.1% annually, it was 0.1 percentage points above forecasts and marked the highest level since February — just before President Trump’s tariffs began in April.

Investors are now focusing on the producer prices (PPI) released this afternoon.

Markets: Cheering the better figures

• US equities trading at fresh all-time highs

• US yields initially ticked higher, but have since moved lower

• US dollar weakened on the release

My View: Investors are focusing on the softer headline figure while downplaying the rise in core inflation. Markets are already pricing in a 25 bps cut in September, with some even speculating on 50 bps. Such a move would be less a sign of strength than of economic weakness.
At this stage, the Fed’s next step is difficult to predict, not least due to mounting political pressure. Aside from the recent correction in job data, the broader US economy still shows resilience, while price dynamics are tilting upward.

I remain cautious in the near term. The inflationary impact of tariffs has not yet filtered through to consumer prices. Producer prices may be the first to capture this pressure, which makes today’s PPI release a key figure to watch.

For equities, the question is what can drive markets higher from here. With valuations stretched and optimism largely priced in, there are almost no positive catalysts left to surprise on the upside.

US President Donald Trump has extended the pause on China tariffs for another 90 days, pushing the deadline to November 9, 2025. This delay prevents a sharp increase in tariffs, which were set at 145% on imported goods from China.

Markets: Only a short-lived reaction

• China: the positive reaction was only short-lived — stock indices ended the day in plus

• US stock Futures trading almost unchanged

My View: Markets have grown indifferent to tariff-related announcements since the topic first shook markets in April. The reactions, both upward and downward, have become significantly more muted over time.

While the tariff pause provides short-term stability, I believe the market is still clinging to the TACO, betting that tariffs will eventually be removed with trade deals. However, investors continue to overlook the broader impact of tariffs on the economy, corporate earnings, and consumer behavior.

Looking at the "big beautiful bill," it’s clear that tariffs serve as a critical income source for the US. This makes it very likely that tariffs are here to stay. Investors still bet and hope for an eventual resolution.

The Bank of England (BoE) reduced its interest rate by 25bps to 4% yesterday, a move that was largely anticipated.

Meanwhile, US President Donald Trump announced the nomination of a new Federal Reserve governor, Stephen Miran, to serve on the Federal Reserve Board of Governors, to replace Adriana Kugler, who resigned last Friday.

Markets: Interest rates with an uptick

• US 10-year yield: slightly higher from 4.20% to 4.26%

• UK 10-year yield: up from 4.5% to 4.57%

My View:
In both cases, one would have expected yields to decline, given the dovish stance of the BoE rate cut and the potential for increased stability within the Fed. However, the opposite occurred

It appears that President Trump’s replacement of the Fed governor signals a desire to maintain stability within the central bank, reducing the likelihood of Chairman Jerome Powell being replaced before the end of his term.

In the UK, despite the rate cut, the 10-year yield increased, suggesting limited downside potential. This is likely due to the ongoing strain on the UK budget. On any news regarding this topic, the yields react with an uptick.

The trading range of the both, the UK and US 10-year yield seems to continue. The effect of tariffs is still not mirrored in the markets why there could be even an uptick going forward.

ETFMandate Portfolio: With some uncertainty of the further short-term direction of yields and given the trading range of both the UK and US 10-year yields, I decided to close both bond positions at the lower end of their respective ranges.

• US 10-year yield: Closed at 4.2% (initially bought on 07.01.2025 with a yield near 4.8%)

• UK 10-year yield: Closed at 4.5% (initially bought on 14.01.2025 with a yield above 4.95%)

On both positions I could realize a profit of more than 11% (price return), implemented via a ETF, 3x leveraged.

In the latest developments, tariffs are once again making headlines:

Semiconductors: The US wants to imposed a 100% tariff on imported chips, aiming to force critical supply chains back home.

• India: Penalized with additional tariffs due to ongoing oil trade with Russia.

• Switzerland: As of today, a 39% blanket tariff is now in effect on Swiss goods entering the US. T

• Pharma: A proposed 250% tariff on selected pharmaceutical imports is on the table

Markets: Despite the escalation, markets remain unfazed.

• US Futures: Nasdaq +0.8%, S&P 500 +0.65%

• Switzerland: Swiss Market Index +1.0% despite tariffs

• Europe: Broad-based gains, major indices up more than +1%

My View: Markets appear desensitized to tariff headlines, treating them as noise and assuming eventual deals, delays, or walk-backs. That assumption could prove costly. The Swiss case shows this is no longer just rhetoric, it’s execution.

Investor positioning still reflects complacency: investors remain fully allocated to risk assets, with limited hedging and little exposure to defensive sectors.

In a market where risk is underpriced, it’s worth rethinking allocation.
Since July, I’ve been gradually taking chips off the table. One area where I see opportunities is the defensive sector largely ignored so far, Food & Beverage, offering long-term potential and limited downside with a attractive dividend yield.

A batch of US macro data released on Friday came in weaker than expected:

• Labor market: Job data missed forecasts, and previously published figures were revised downward.

• Consumer sentiment: Confidence levels deteriorated.

• Inflation expectations: Both short- and medium-term outlooks surprised to the downside.

Markets: US markets with strong rebound after equity indices slumped on Friday

• Nasdaq Index +1.7%

• S&P 500 Index +1.3%

• US yields sideways (10-year Treasury at 4.2%

• Gold +0.4%

• US dollar weaker

My View: After Friday’s dip, markets have once again shrugged off negative news, starting the new week with a rebound — a now familiar pattern of buying into weakness.

While the data is backward-looking, it could mark the first meaningful signs of the economic drag from the newly imposed tariffs, even flashing some warning signs.
The employment report released Friday painted a much weaker picture of the labor market than previously reported. Inflation-adjusted consumer spending, which accounts for nearly two-thirds of US economic activity, declined in the first half of the year. While the Fed’s preferred inflation gauge rose again in June and came in higher than expected.
This data mix signals a potential loss of economic momentum.

So far, the market continues to discount these risks. But that complacency may not last if the weakness broadens. The notion of a resilient labor market is increasingly being challenged — and with consumers starting to pull back, the foundations of recent economic optimism are looking less solid.

As Swiss market was closed on Friday due to the Swiss National Day, all eyes were on the Swiss stock market this morning. How would investors react on the implications of the newly imposed 39% US import tariffs on Swiss goods, set to go into effect on 7 August.

Markets:

• Swiss Market Index (SMI): -0.35% (opened this morning at -1.6%)

• Swiss Bond Yields: Lower across the curve; 10-year yield down to 0.30%

• Swiss Franc (CHF): Initially weaker, but regaining ground — USD/CHF at 0.8084, EUR/CHF at 0.9347

My View: Swiss equities, particularly the large pharmaceutical names, continue to show notable resilience. There seems to be a growing trend among retail investors: buying dips. The recurring pattern of markets rebounding after small drawdowns has reinforced this behavior, with more investors adopting it as a short-term strategy.

However, this approach effectively assumes that a US-Swiss trade deal is within reach. A risky bet given recent signals from Washington. According to U.S. trade representative Jamieson Greer, the newly introduced tariffs by President Trump are “almost final” and not expected to be the subject of negotiations anytime soon. However, it seems that there is a time window of 72 hours.

This casts doubt on hopes for a swift resolution and introduces a structural risk for key Swiss exporters, particularly in sectors like pharma, machinery and luxury goods. While the market still holds up, the medium-term outlook hinges heavily on geopolitical developments that may not turn favorable anytime soon.

Therefore I did not buy into this dip.

As the August 1 deadline passes, the U.S. has finalized its latest round of global tariffs. Trump’s executive order imposes duties ranging from 10% to 41% on dozens of countries, along with an additional 40% penalty on goods flagged as transhipped.

Switzerland was slapped with a 39% levy on imports, higher than the 31% rate initially announced. The US had a USD 38 billion trade deficit with Switzerland last year and the economy rests on large contributions from industry giants Novartis and Roche.

India, meanwhile, has been singled out for a 25% tariff rate on its exports. But that's not all. Trump announced that India would also face an unspecified “penalty” for its continued military and energy dealings with Russia.

Markets: Swiss Market is closed today (Swiss National Day) - Equity indices down across the globe - Swiss franc weakens - cryptos down

My View: This time, there was not deadline extension. The TACO trade was still on, why some investors got now caught on the wrong foot.

Despite prior warnings, it seems Swiss authorities didn’t push hard enough to secure a deal, unlike peers such as the UK, Japan, the EU and Vietnam who negotiated lower rates or exemptions earlier this year.
With pharma, luxury goods, and precision machinery among Switzerland’s key exports to the US, the potential impact for several companies could be more severe than previously anticipated.

With the second tariff round imposed to India, it seems that geopolitical alignment is now firmly entangled in trade policy.

As mentioned in my previous updates, the latest headlines could act as a catalyst for increased market volatility in the days ahead.

Microsoft delivered a strong fiscal first quarter with revenue of USD 76.4 billion and EPS of USD 3.65, both beating expectations. The company also unveiled bold capex plans of around USD 100 billion for AI and datacenter expansion across 2025–2026.
Shares surged over 9% in after-hours trading, pushing Microsoft’s market cap above USD 4 trillion.

Meta also outperformed in Q2, reporting USD 47.52 billion in revenue (+22% YoY) and EPS of USD 7.14, well above forecasts. The company raised its full-year outlook and guided Q3 revenue to USD 47.5–50.5 billion, topping the USD 46.14 billion estimate. Meta also increased the lower bound of its capex guidance to USD 66 billion.
The stock jumped 12% in extended trading hours.

Markets: Nasdaq futures hit new record highs, up +1.4%

My View: Just some hours after the hawkish Fed tone, the momentum-driven tech rally gained new fuel from Microsoft and Meta’s strong earnings, reinforcing investor enthusiasm around AI and cloud. While growth remains impressive, the durability of this momentum will depend on capital discipline, continued cloud adoption, and broader macro conditions.

Markets are cheering the massive wave of AI-driven capex, echoing the early e-commerce boom. But this time, it's established, cash-rich companies with resilient business models, not speculative newcomers. Still, these massive investments must ultimately translate into meaningful returns to justify the scale of spending.

Such sharp post-earnings gains, especially following an already extended rally, are often short-lived.

Disclosure: Short position on Meta

In its July policy meeting, the Federal Reserve left its benchmark interest rate unchanged, holding the federal funds rate at a range of 4.25% to 4.50%. The decision came despite growing pressure from President Donald Trump and dissent from two Federal Open Market Committee (FOMC) members who favored a rate cut.

The vote was 9-2, highlighting a growing divide within the Fed. Fed Chair Jerome Powell stressed that no decision has been made regarding the September meeting, stating, “We have made no decisions about September…”
The central bank is monitoring the inflationary impact of ongoing tariffs, adding another layer of complexity to their policy outlook.

Markets: US stocks ended mixed - yields ticked up together with the US dollar - gold more than 1% lower - cryptos see high fluctuations

My View: In the US, solid economic data paints a picture of continued strength. Today, reported GDP growth surprised to the upside at 3.0% (vs. 2.4% expected), and the ADP employment report showed 104,000 jobs added (vs. 75,000 est.), further supporting the case for a “higher for longer” interest rate environment.

While the backward looking data justifies the pause, it doesn’t guarantee stability, especially with tariffs and global headwinds still looming.
That said, the internal divide within the Fed and external political pressure could add complexity to the policy path going forward. However, as long as Powell keeps the mandate as the chairman a smooth path without big surprises can be expected.