UBS Predicts “Trump Put” to Drive Policy Amid Volatility
- Trump’s statement hints at an economic policy shift.
- Volatility remains high for U.S. markets.
- UBS sees potential rate cuts as likely in 2025.
UBS predicts ongoing market volatility as President Trump and the Federal Reserve may adjust policies to counter market stress, reported on April 22, 2025.
UBS’s expectation of a ‘Trump put’ highlights the administration’s sensitivity to financial stresses, with the possibility of notable rate cuts.
The market anticipates policy adjustments stemming from President Trump’s assurance that Jerome Powell will remain Federal Reserve Chair. Mark Haefele, Chief Investment Officer of UBS Global Wealth Management, noted:
“We believe the demonstrated willingness from the Trump administration to change its stance in response to equity and bond market turbulence indicates some sensitivity to market stress, and points to the existence of a ‘Trump put’ in some form.”
The President’s remarks stirred market movements, with substantial rate corrections anticipated, particularly as layoffs increase. Crypto markets shared in the fluctuations, with BTC’s realized volatility aligning with equity market swings. The influence of Trump’s public declarations on economic policy has historical precedents, causing fluctuations previously seen with tariff announcements in 2018.
UBS’s recent report highlights the “Trump put”, expressing confidence that current policies will address equity and bond market volatility concerns. Historical episodes suggest similar market rebounds when conciliatory policies are pursued, with crypto assets often mirroring these movements.
Financially, UBS expects explicit rate modifications to mitigate potential economic declines, foreseeing strategic policy shifts. Market participants remain attentive to evolving dynamics, focusing on phased equity market entry and balanced portfolios in unpredictable climates. The expectation of rate adjustments by the Federal Reserve persists, aimed at counterbalancing economic downturns. Market sensitivity to government intervention is evident, underscoring the interconnected nature of crypto and traditional asset movements during economic policy shifts.
