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Key takeaways

It should no longer come as a surprise that President Trump has taken over the headlines. This week, it was his apparent attempt to disrupt the US central bank which caught the media’s attention.

Trump is pushing for change at the US central bank
The president’s team unceremoniously fired Lisa Cook, a member of the board of governors at the US Federal Reserve (Fed), citing mortgage fraud. Cook’s removal would allow Trump to appoint a replacement of his choosing to the board, potentially ‘stacking the deck’ in his favour when it comes to US interest rate decisions, which are made by the Fed. In response, Cook is suing Trump, and has applied for an injunction to allow her to continue in her role while the case plays out. We are still waiting to hear the court’s verdict on this.

Markets are interpreting changes in their own way
Trump’s goal may be to lower the cost of the US government’s debt, but ironically the interest paid on longer-dated bonds is rising. This is because although markets expect more interest rate cuts in the near term, they anticipate potentially higher inflation over the longer term. In short, markets are hinting that missteps could take place in the future, causing inflation to move higher. History offers stark lessons when it comes to politicians meddling with the credibility of central banks, with this typically leading to higher inflation, volatile economic growth and a weaker currency. The latest situation remains very much ongoing, and we’ll be watching developments closely.

Stubbornly high US inflation, despite progress
Sticking with the world’s most influential economy, last week saw the release of a spate of more encouraging US economic data. From an improvement in growth figures in the second quarter of the year, to lower weekly unemployment claims, investors were given some reassurance about the outlook for the US economy. However, the latest personal consumption expenditures (PCE) inflation figure – which is the Fed’s preferred measure of inflation – pointed to stubbornly high pricing pressures. Uncertainty over the medium-term inflation impact of tariffs is certainly making the Fed’s job difficult at the moment, and tariff headlines also appear to be picking up again – another area to watch.

Market moves

  • It was a fairly quiet and subdued week for global stock markets. European share prices fell amid political instability in France, while US shares eked out small gains.

  • Bond prices were slightly higher (in sterling terms), with the exception of UK government bonds, which fell slightly.

  • The price of gold rose, adding to its fantastic 2025 run so far.

What to look out for this week

  • Economic data due for release this week includes employment figures for Europe, manufacturing and services data for the US, and retail sales news in the UK.

  • Most closely watched will be US employment data for July, which will be released on Friday.

Important Information

Handelsbanken Wealth & Asset Management Limited is authorised and regulated by the Financial Conduct Authority (FCA) in the conduct of investment and protection business, and is a wholly-owned subsidiary of Handelsbanken plc. For further information on our investment services go to wealthandasset.handelsbanken.co.uk/important-information. Tax advice which does not contain any investment element is not regulated by the FCA. Professional advice should be taken before any course of action is pursued.

All commentary and data is valid, to the best of our knowledge, at the time of publication. This document is not intended to be a definitive analysis of financial or other markets and does not constitute any recommendation to buy, sell or otherwise trade in any of the investments mentioned. The value of any investment and income from it is not guaranteed and can fall as well as rise, so your capital is at risk.

We manage our investment strategies in accordance with pre-defined risk objectives, which vary depending on the strategy’s risk profile.

Portfolios may include individual investments in structured products, foreign currencies and funds (including funds not regulated by the FCA) which may individually have a relatively high risk profile. The portfolios may specifically include hedge funds, property funds, private equity funds and other funds which may have limited liquidity. Changes in exchange rates between currencies can cause investments of income to go down or up.

This document has been issued by Handelsbanken Wealth & Asset Management Limited. For Handelsbanken Multi Asset Funds, the Authorised Corporate Director is Handelsbanken ACD Limited, which is a wholly-owned subsidiary of Handelsbanken Wealth & Asset Management, and is authorised and regulated by the Financial Conduct Authority (FCA). The Registrar and Depositary is The Bank of New York Mellon (International) Limited, which is authorised by the Prudential Regulation Authority and regulated by the FCA. The Investment Manager is Handelsbanken Wealth & Asset Management Limited, which is authorised and regulated by
the FCA.

Before investing in a Handelsbanken Multi Asset Fund you should read the Key Investor Information Document (KIID) as it contains important information regarding the fund including charges and specific risk warnings. The Prospectus, Key Investor Information Document, current prices and latest report and accounts are available from the following webpage: wealthandasset.handelsbanken.co.uk/fund-information/fund-information/, or you can request these from Handelsbanken Wealth & Asset Management Limited or Handelsbanken ACD Limited: 77 Mount Ephraim, Tunbridge Wells, Kent, TN4 8BS or by telephone on
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