Helen Bradshaw

The summer months have done little to calm the volatility that has defined markets in 2025. Despite persistent geopolitical tensions and a sweeping overhaul of US trade policy, equity markets have continued to climb. Tariffs posing headwinds August saw the full activation of the US administration's new tariff regime, with country-specific duties now applied to over 70 trading partners. The average US tariff rate has surged to over 18%, the highest since the 1930s. We remain concerned as to who will pay for this and note signs that the impact is starting to show through in producer price inflation. This could pose headwinds to corporate earnings, broader inflationary pressures, and the expected path of interest rates to the end of the year. Geopolitical tensions remain elevated At the same time, geopolitical tensions remain elevated. This has added to investor caution, particularly as political interference in US central bank policy raises concerns about monetary independence. Focused on diversification Despite this, equity markets have remained buoyant. However, our enthusiasm remains tempered by the disconnect between valuations and the underlying risks. We continue to monitor economic data and policy developments closely, and have focused recent activity on profit taking, leaning into areas of weakness as well as ensuring the portfolios remain well diversified.

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