UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'More tariff threats?'
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Feb 26, 2026 Discussion of the Bank of Korea’s decision to keep rates steady and its new six-month forward guidance. A look at the Bank of Korea adopting a Fed-style dot-plot forecast. Analysis of recent US tariff notices and the resulting policy uncertainty. Concerns about how renewed trade-policy uncertainty could freeze business decisions. Notes on jobless claims, central bank speeches, M3 money supply trends, and a brief aside on crypto.
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Bank Of Korea Signals Six Month Policy Pause
- The Bank of Korea left rates unchanged and introduced forward guidance signaling no rate changes for six months.
- Paul Donovan noted the BoK copied the Fed's dot-plot approach but adds upside and downside scenarios, showing early optimism and a strategy of measured inaction.
Tariff Shifts Rekindle Policy Uncertainty
- US tariff moves created renewed policy uncertainty after initial weekend talk of 15% and a 10% tariff on Tuesday.
- Donovan highlighted the shift to a possible 15% fee for some countries increases uncertainty that could paralyze US business decision-taking again.
Jobless Claims May Understate Labour Weakness
- US initial jobless claims are modestly more important given weak 2025 job creation, but may not rise in a stagnating hire/no-hire market.
- Donovan explained entrants unable to find work won't show in claims, muting this indicator's signal.