The Tariff Deal with the EU

In this podcast, Stephan Kemper, Chief Investment Strategist, and Guy Ertz, Deputy Global Chief Investment Officer explore the economic impact of the EU–US trade deal, its influence on inflation, the likely response from central banks, and the consequences for equity markets.

·         The economic impact of the deal : The agreement avoids a trade war and boosts European confidence, despite 15% tariffs on key exports like autos and semiconductors.

·         Will inflation rise as a result? A temporary inflation spike is expected in the US, lasting 6–8 months, driven by cost pass-through and margin pressure.

·         How will central banks respond? The Fed is slightly to cut rates further by year-end despite a temporary rise in inflation, the ECB should cut one mor time as inflation stabilized around target.

·         What are the consequences for equity markets? US equities face valuation and margin risks, while European markets benefit from reduced uncertainty, strong investment flows, and attractive valuations.

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