Tag: USA

What are the Abraham Accords and its Impact on Muslim/Arab Nations?

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

The Abraham Accords are a series of United States brokered diplomatic agreements launched in 2020 during Donald Trump’s first term as President of America. Such agreements are to normalise relations between Israel and several Arab and Muslim-majority nations. The accord was named after the biblical patriarch Abraham, to emphasise the shared roots of Judaism, Christianity and Islam. 

The accords marked the first formal recognition of Israel since Egypt in 1979 and Jordan in 1994. In September 2020, the first to sign the accords were the UAE (United Arab Emirates) and Bahrain, closely followed by Morocco and Sudan* in late 2020 and early 2021 respectively. *Please note that Sudan’s agreement remains unratified due to domestic and political instability.

At the heart of the accords is the shifting of Middle East foreign policy from a “Peace for Land” model to a “Peace for Peace” paradigm focusing heavily on practical regional growth. As a result of the accord, new avenues for tourism were opened up, including new direct commercial flights and innovation partnerships. Trade relations between the UAE and Israel increased dramatically resulting in a historic Free Trade Agreement.

However, as analysts and experts have been quick to point out due to the on-going Iran/ Israel/ United States conflict that began on February 28th this year, the accords are facing some significant headwinds. Pressure on the Accords has been increased by President Donald Trump, who has publicly demanded that Arab and Muslim nations such as Egypt, Jordan, Pakistan, Qatar, Turkey and Saudi Arabia sign up to the Abraham Accords.

President Trump’s demands have faced a political backlash from these nations and have been met with immediate resistance with Pakistan (who are currently mediating between the USA and Iran), explicitly rejecting the proposals by President Trump, especially on ideological grounds. Indeed, Palestinian officials have said they have been betrayed by their Arab counterparts for reaching agreements and deals with Israel without first demanding immediate progress towards the creation of a Palestinian state.

In fact, experts suggest that President Trump has made the signing of the Accords as part of the peace deal that he is negotiating with Iran, and as such has ramped up the pressure on Qatar and Saudi Arabia to sign. This offer by President Trump has so far been met with silence from both Qatar and Saudi Arabia, however, both countries have said they will only recognise Israel if the government agrees to Palestinian statehood. Trump has even gone so far as to say that Iran could also join the accords, but this is highly unlikely as Iran’s regime calls for the destruction of the Jewish state.

However, whether or not Qatar and Saudi Arabia sign the Abraham Accords remains a moot point, as today both US and Israeli fighter jets struck Iranian vessels in the Strait of Hormuz and other targets. Meanwhile, President Trump was insisting a deal with Iran to open up the Strait of Hormuz is now close, however, recent attacks by the USA and Israel may, experts say, forestall any immediate agreement. Some political commentators suggest that a peace deal is still far away as Iran will never give up their ability to produce nuclear weapons, and as such, the US/Iran/Israel conflict could reignite into a full blown war. 

Will Private Credit Trigger Another Systemic Financial Collapse?

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

A number of financial commentators have recently opined that recent ructions in the private credit market might bring about a repeat of the GFC (Global Financial Crisis) that the world suffered 18 years ago in 2008. Such commentators advised that investors were getting skittish with regards to the $3.50 trillion in AUM (assets under management), and for the first time, recent inward investments of $5 Billion were overshadowed by outflows/redemptions of $7 Billion. Also, a recent report on 6th May 2026 by the FSB, (Financial Stability Board, headquarters basel, Switzerland) highlighted not just the benefits, but real vulnerabilities including complex interlinkages with banks, borrower credit quality concerns, and valuation opacity.

Shifting Sectors and Transparency Deficits

Analysts suggest that data shows some funds have lent heavily to companies in the software and tech sectors where existential threats from AI could exist, plus there are worries of an AI bubble bursting. Furthermore, the private credit market is suffering from a lack of transparency making it difficult to summarise what and how strong lender protections are in place, plus making it just as difficult to understand how loans in this market are performing. 

Institutional Exposure and Global Footprint

Private credit experts point to the massive sector exposure held by traditional financial institutions. Current data confirms that non-bank financial institutions hold circa $2 trillion in private credit exposure, followed by insurance companies at roughly $1 trillion, and banks with approximately $300 billion. The US currently dominates the $3.5 trillion private credit market accounting for circa 75% of global activity, with Europe in second place accounting for circa EUR400 billion in AUM.

Lessons from 2008: The Subprime Catalyst

However, various experts point out that during the 2008 financial crisis, the initial subprime market was actually quite small. The widespread economic damage was ultimately driven by complex derivatives and the enormous leverage built up on top of those subprime loans. Everything began to grow exponentially when banks bought subprime loans and packaged them into MBS (Mortgage Backed Securities)**.

*The Subprime Market 2008 – This was a segment of the lending industry that provided mortgages to high-risk borrowers with poor credit scores or low incomes. As these borrowers were more likely to default, lenders charged higher interest rates, and history shows the mass defaults in this area triggered the 2008 GFC. 

**MBS/Mortgage Backed Securities – These were the primary catalysts for the 2008 GFC. They are financial products where banks bundle thousands of individual home loans together and sell them to investors who are looking for high-yield bonds. Many of the buyers were from Wall Street who repackaged the MBS into CDOs (Collateralised Debt Obligations)***.

***CDO/Collateralised Debt Obligation 2008 – These were complex financial instruments that pooled together various debt assets (e.g., mortgages) and repackaged them into tranches with varying levels of risk, from AAA down to junk being the subprime mortgages. However, because of the senior risk packaged into the CDOs, the rating agencies gave them a AAA rating allowing institutions such as global banks to purchase these instruments without risk.

The Collapsing House of Cards

In short, when the subprime mortgages failed, they brought down the whole house of cards as the global market for CDOs exceeded $1.5 trillion (of which 700 billion contained subprime MBS). As the subprime borrowers began to default the CDOs effectively became worthless, forcing global banks to write down hundreds of billions of dollars. This engendered a lack of trust between banks, who refused to lend to each other wiping out the wholesale market. As a result, some of the major banking names had to be bailed out. Lehman Brothers, the fourth largest investment bank in the US, with 25,000 employees worldwide, filed for Chapter 11 bankruptcy protection on 15th September 2008. 

Synthetic CDOs and the Insurance Multiplier

However, there was another player in the collapse of the banking system in 2008, that is the synthetic CDO which was a complex financial derivative that actually accelerated the financial crisis. This synthetic CDO did not hold actual mortgages. Instead, it referenced a portfolio of MBS. Investors in this instrument sold Credit Default Swaps (CDS) on those reference assets in exchange for regular premium payouts. The primary buyers of these CDS were hedge funds looking to bet against the housing market. 

*Credit Default Swaps – This is a financial derivative that acts like an insurance policy against a borrower defaulting on a debt, such as a corporate bond, loan, or a CDO. Investors use it to protect themselves from losses or to speculate on the financial health of an entity.

This type of CDO required no cash, just a derivative contract, and those in this market were able to create multiple synthetic CDOs on the same pool of MBS, magnifying the number of bets tied to a single underlying home loan. The dominant seller of the underlying insurance was AIG (American International Group) who did not bother to hedge their risk, as the rating agencies also issued AAA ratings on the synthetic CDO. When the crash arrived on September 15th, 2008, AIG were on the hook for a staggering $32 billion, which they could obviously not cover, the rating agencies slashed AIG’s credit rating, and they had to be bailed out by the US government. 

Structural Divergence: Private Credit vs. Subprime Debt

In today’s market, some experts are saying that private credit is not the same as subprime and private credit is just another term for direct lending. The derivative structures (CDOs synthetic CDOs*) and unhedged insurance cover on credit default swaps, that turned the subprime losses into a global disaster simply do not exist in a comparative form in the private credit market. 

This does not mean to say that there won’t be a crisis in the private credit arena, but probably not to the extent that plagued the financial system in 2008. However, when a private credit fund struggles, losses will appear on the lending banks balance sheet as they provided the leveraged funds for the loan book in the first place.

Regulatory Safeguards: The Basel III Framework

After the 2008 crisis, the Bank for International Settlements (BIS), the central bank for central bankers, issued updated rules for Tier 1 and Tier 2 capital. This meant commercial banks had to hold significantly more capital on their balance sheets to prepare for future downturns. Over the years, regional central banks have used strict financial stress tests to ensure local institutions comply with these BIS requirements.

The Risks of Contemporary Deregulation

However, regulators in the US are actively loosening banking constraints, making one of the most significant rollbacks since the GFC 2008. Federal agencies have advanced sweeping proposals to reduce Tier 1 capital requirements and ease leveraged lending restrictions, effectively freeing up billions of dollars in Wall Street lending. Many experts, analysts and financial commentators fear the worst, as when President Trump loosened up financial restrictions in his first term, the US went on to suffer from the regional banking crisis.

Looking Ahead: A Wait-and-See Market

As always, lessons from the past are soon forgotten, and if the private credit market does become a problem, and it may not replicate the GFC in 2008, but with Tier 1 capital adequacy rules being torn up in the USA, markets can only wait and see what potential fallouts may present themselves to the global economy as a whole.

Extended Sell-off in Global Bonds

Written by IntaCapital Swiss on . Posted in Iran, News & Reports. Leave a Comment

The global bond sell-off deepened dramatically last Friday and continued into this week as the geopolitical deadlock over the Iran war drove oil prices higher. At Friday’s close, benchmark Brent Crude had risen 1.8% to $111.16, while U.S. West Texas Intermediate futures climbed just over 2.00% to settle at $107.56.

The 30-year US Treasury (U.S. Government Bond), which is a benchmark for long-term global interest rates, saw yields rise to 5.16%, the highest since October 2023. The 2-year treasury touched a 14-month high of 4.102%, and is considered the most sensitive benchmark to inflation and rate expectations.

In Germany, the 10-year German Bund saw yields rise by two basis points, hitting 3.1827%. In the United Kingdom, after a turbulent week last week, the 10-year gilt, a benchmark for UK government debt, saw yields ease slightly by circa 1 basis point, but remains elevated at 5.169%. In Japan, the 10-year JGB (Japanese Government Bond) raced to 2.739%, last seen this high in 1996, an increase of 13 basis points, whilst the 30-year bond surges 20 basis points—the highest since its debut in 1999.

Financial markets are betting that central banks will have to employ monetary tightening and raise interest rates, as the continuing closure of the Strait of Hormuz keeps energy prices elevated, negatively impacting inflation. President Donald Trump has warned Iran that the “clock is ticking” for them to strike a deal, and yesterday announced on his media outlet ,Truth Social, “They (Iran) had better move fast or there won’t be anything of them left”.

However, experts warn that previous deals offered by Iran and the US have been rejected by both sides, and further note that there appears little prospect for a deal between the US and Iran. With manufacturing supply chains signalling an ever increase in prices, plus a lack of energy flows from the Persian Gulf, it seems inevitable that interest rates will rise across major financial centres as central banks battle to keep inflation under control. 

Many experts agree that between rising inflation, high sovereign debt, increasing interest rates, plus the recent gains in government bond yields in developed countries, the global economy is in danger of negative impacts in the next three to six months. Even if the war were to end tomorrow, oil prices will remain elevated due to supply chain bottlenecks, a lack of investment in the energy sector, plus the need to restructure global energy security.

Financial and political commentators are laying the blame for the present global fiscal problems at the door of President Donald Trump. The US/Iran/Israel war began on 28th February 2026 with the White House trumpeting that Iran’s ballistic missile programme could endanger US allies including Europe and the American mainland. 48 days later, the Strait of Hormuz remains shut, the war is at a standstill, and energy and food prices will begin to rocket should there be no conclusion either way to this conflict.

As a result, experts suggest that bond prices will continue to soar, and financial markets feel that if the hard left of the UK Labour Party replaces UK Prime Minister Sir Keir Starmer, spending will be out of control and gilts may reach levels not seen before. In the US, financial markets are saying the Federal Reserve needs to get behind the inflation curve and remove the bias towards easing monetary policy. If not, the word is investors will demand a higher inflation risk premium.

Federal Reserve Keeps Interest Rates on Hold

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

Yesterday, Jerome Powell, the Federal Reserve Chairman, officiated at his last FOMC (Federal Open Market Committee) meeting where benchmark interest rates were kept on hold for a third consecutive time at 3.50% – 3.750%. The increasing uncertainty with the Middle East crisis left the committee deeply divided voting by 8 – 4 to keep interest rates steady. This was the first time since October 1992 where four committee members dissented against the FOMC decision, with Governor Stephen Moran voting in favour of a 25 basis point cut. 

Three other Federal Reserve Presidents: Beth Hammack, Neel Kashkari and Lorie Logan of Cleveland, Minneapolis and Dallas respectively, all agreed to hold rates but dissented because they “could not support inclusion of an easing bias in the statement at this time”. Experts suggest that the dissents caught financial markets by surprise, and despite the nomination by President Trump of dove leaning Kevin Warsh* as the new Fed Chair, the vote could indicate a shift away from rate cuts at future meetings. 

*Kevin Warsh – He has passed a major hurdle to become the next Chairman of the federal reserve, as yesterday, he was approved by the Senate Banking Committee. The nomination now advances to a full senate vote with the earliest date being the 11th May 2026.

Analysts advise that money markets are betting that there will be no further rate cuts in 2026. However, analysts now suggest a better than 25% chance of a rate hike by early next year. This shift comes as oil prices climb back above $100/bbl, driven by the ongoing Middle East conflict and the continued blockade of the Strait of Hormuz, a chokepoint for 25% of the world’s oil. Experts advise the big fear for policymakers is that the current energy-driven price shock feeds into a broader, more consistent core inflation. 

On that note, US headline inflation for March 2026 jumped to 3.30%, the highest level since May 2024. Core inflation (excluding food and energy) also rose slightly to 2.60%, with policymakers still adopting a wait and see attitude towards inflation. However, on the employment front, the unemployment rate for now appears to have stabilised, but net hiring flattened out to just about zero over the past year. Experts and policymakers are suggesting this would make the labour market more vulnerable to shocks.

Finally, Chairman Powell’s tenure as the Chair of the Federal reserve ends on 15th May 2026, but under current rules he can remain on the board until January 2028. Historically, Fed Chairs typically resign from the Board of Governors entirely upon leaving the chair. However, Jerome Powell has opted to remain on the board, a decision that prevents President Trump from appointing a new governor who might align more closely with White House policies. Chairman Powell noted, “I plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair”.

United States, Israel and Iran Agree to Temporary Ceasefire

Written by IntaCapital Swiss on . Posted in Iran, News & Reports. Leave a Comment

A two week temporary ceasefire in the current Middle East hostilities has been agreed, but only one hour before President Donalds Trump’s deadline where he had promised to obliterate Iran. The ceasefire, which was brokered by Pakistan, includes a 10-point plan with Iran opening up the Strait of Hormuz whilst on-going peace talks continue. As a result, oil fell below $100pbl, with Brent crude falling by as much as 16% to trade within a range of $93pbl – $95pbl. West Texas Intermediate also fell to around the $95pbl mark. 

Those close to the agreement have advised that the 10-point peace plan includes:

  • An end to attacks on Iran and its allies
  • Continued control by Iran over the Strait of Hormuz
  • All primary and secondary sanctions on Iran to be lifted 
  • US military withdrawal from the Middle East
  • The release of all frozen Iranian assets
  • Iran and Oman to levy fees on ships transiting the Strait of Hormuz (USD 2 million per ship)

Interestingly, the above points are also in Farsi, however that document includes the words “acceptance of enrichment” for their nuclear plan, which for whatever reason was left out of the English version. According to a statement issued by state media, Iran will only accept an end to hostilities if the final version of the peace plan incorporates the above demands. Some of these demands have been rejected by the White House in the past, however President Trump said the 10-point peace plan was a “workable basis on which to negotiate”. 

However, a number of experts have advised that the United States are unlikely to agree with some of Iran’s demands, and Democratic Senator Chris Murphy noted that with Iran controlling the Strait of Hormuz, it would be “cataclysmic for the world”. The office of the Prime Minister of Israel, Benjamin Netan, advised that Israel has backed the decision to temporarily cease hostilities with Iran, however, the ceasefire does not include Israel’s current hostilities with Lebanon.

Experts and analysts suggest that whilst the President sees a framework to discuss a permanent ceasefire, they cannot see the United States agreeing to allow Iran to continue with nuclear enrichment. Political commentators advise that the temporary ceasefire has let President Trump “off the hook” in regard to his promise to obliterate Iran. They also note that one of the cornerstones of the attack on Iran was to get rid of the current leadership and return the country to a democratic government. 

Sadly, this has not happened, in fact, nothing has really changed. The IRGC (Islamic Revolutionary Guard Corps) remains the dominant force, and the old guard leadership that has essentially been wiped out has been replaced by more extreme figures. Furthermore, it should be remembered that the IRGC controls 50% of all the income from Iran’s energy exports, so if all sanctions are lifted and all assets unfrozen, this will make them even stronger. 

Experts say that if any agreement is reached it will surely be a hollow victory at best for President Trump, and how this will play out in the US with the mid-terms looming could end up being totally catastrophic for the Republican party. The only other option is a resumption of hostilities, which will be a nightmare for those peace-loving citizens of Iran, and the economic and social repercussions on the rest of the world do not bear thinking about. 

What is the “Taco Trade” and How is it Prevalent in Today’s Markets

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

You might mistake this for a new Mexican futures derivative, but as financial commentators advise, the word TACO is an acronym for “Trump Always Chickens Out”. It describes a strategy where investors “buy the dip”* after a sell-off caused by a Trump policy threat, betting that he will eventually back down or soften his stance.

*Buy The Dip – This is a strategy which involves the buying of assets such as stocks and shares, cryptocurrencies and commodities such as gold and silver, where the aim is to buy low and then profit from the subsequent rebound. Experts advise it works best in long-term upward trends where temporary price dips occur. However, in today’s world, the Middle East crisis together with remarks from President Trump makes buying the dip an almost weekly occurrence. 

There are three stages to this trade:

  1. First, there is the shock when President Trump makes a bold announcement, such as an increase in tariffs, or in today’s world, military attacks and threats. Such actions can cause share and gold prices to drop, sparking off a round of intense market volatility. 
  1. The second stage is the Pivot where faced with negative market reactions or economic pressure, the President softens his stance or rhetoric, delays implementation, or negotiates a framework. 
  1. Finally, there is the Rebound where the threat is reversed, markets recover quickly allowing those who bought at low prices to sell for a profit. 

The TACO trade was initially brought to the fore on Liberation Day, 2nd April 2025, when President Trump announced a steep imposition of tariffs on friends and foes alike, with about 90 countries being hit with blanket tariffs. However, President Trump quickly backed down on his Liberation day tariffs, (except for China) as markets reacted by going into meltdown, and tariffs that were threatened on the Eurozone in May 2025 were quickly pulled back days after they were announced. 

A number of traders in the financial markets accused President Trump of chickening out and started making trades accordingly and thus the TACO trade was born. Today the Taco trade has been reborn with some vengeance due to the surprise attack on Iran by President Trump. The use of Truth Social by President Trump during the current US/Iran/Israel conflict has already upended markets. Recently, he rowed back on threats to hit Iran’s power plants.

So, President Trump chickened out and as a result of his pronouncements stocks rallied, oil prices dropped as he bought time for further negotiations. On another recent occasion, the President announced he was in talks with Iranian officials to end the war, once again oil fell, gold went up, and stocks went up. Iran announced that no talks had been held and the markets swung into reverse with gold going below the support level of $4100 per oz before rebounding to circa $4,400. The TACO trade is back and with markets as volatile as ever, will traders be able to predict what will come forth from Trump’s media outlet Truth Social. 

Global Market Jitters and Sell America

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

The Shift in Global Sentiment

The US Dollar is viewed as the world’s reserve currency; US Treasuries are among the top safe-haven assets, and US financial markets are regarded as the most liquid and exceptionally deep. However, there is a sentiment running through many major financial centres that perhaps it is time for global markets/investors to sell America. This narrative has not taken place this year, as analysts look back to 2nd April 2025, when they feel it began when President Trump announced his Liberation Day tariffs and upended the global trading system as we knew it.

Geopolitical Tensions and Economic Implications

This feeling of sell America became more pronounced in January of this year when President Trump announced he wished to take over Greenland, which is part of Denmark and a NATO ally, which fired up more anti-American/Trump sentiment among Europe’s leaders. However, analysts advise that this sentiment has died down for the time being, but if there was a measured shift towards sell America, the implications for the US economy could well be severe. For many decades, the United States has enjoyed unparalleled faith in their currency and the treasury market from overseas investors who have ploughed funds into the US economy.

If sentiment moves away from US assets, as they are now considered not to be the safest of havens, experts advise that if overseas investors begin to sell, the US Dollar would weaken, and the availability of capital to both companies and the government would shrink considerably. Indeed, some experts fear that if US consumers face increasing costs as imports become more expensive, whilst at the same time borrowing costs go up, it could become an ongoing cycle where recession rears its ugly head as the federal deficit becomes less sustainable.

Eroding the Foundations of US Investment 

Experts argue that since the early 1960s (if not earlier), overseas investors have been attracted to the United States due to several factors such as a stable US Dollar, a commitment to free trade, extremely deep capital markets, superior bond ratings, legal protections and an independent monetary policy ( independent Federal Reserve). If any of the above start being stripped away, analysts advise that financial markets would probably react negatively towards US assets and the greenback. An example of this is the debasement trade* where markets and investors sell currencies they feel are being devalued due to the incumbent government policies.

The Rise of the Debasement Trade

*Debasement Trade – A financial strategy where investors invest in assets such as Bitcoin and gold as a hedge against the devaluation of fiat currencies is known as a debasement trade, with key takeaways being rising sovereign or government debt, geopolitical instability, and inflation. Experts advise that investors have been selling major currencies and running to alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even some collectables such as Pokémon cards, which in mid 2025 reached an all-time high.

Pressure on the Federal Reserve

President Trump’s continued attack on the current Federal Reserve, Chairman Jerome Powell, for not lowering interest rates and his rhetoric regarding the reduction of their independence has continued to spook financial markets. This was reflected in April 2025 when the stock markets (S&P 500, Dow, Nasdaq) fell by more than 2%, and the US Dollar plunged to a three-year low. The above was described by experts as a significant event and occurred after President Trump described Fed Chairman Jerome Powell as a ‘major loser’ as he increased his attacks on the central bank.

Market Volatility and the Greenland Conflict

Another example of global market jitters came on 20th January this year, following President Trump’s social media postings which threatened 10% – 15% tariffs on countries (including Denmark, France, Germany and the UK) if his European allies tried to block his takeover of Greenland. This triggered a sharp sell-off where the Dow Jones fell 1.8%, the S&P 500 fell over 2%, wiping off $1.2 Trillion in value, and the Nasdaq Composite fell by 2.4% with tech stocks leading the way. Investors fled to safe havens, helping to push gold beyond a new record of $4,000po. However, the markets bounced back the following day, as in Davos at the World Economic Forum, President Trump announced a de-escalation, stating he would not use force over Greenland and promised a future framework of a deal with NATO, plus he withdrew the imminent threat of tariffs.

Resilient Corporate Growth and Hedging Strategies

However, several experts advise that it might be difficult to “Sell America” where corporate earnings growth has seriously outpaced their peers in any other regions across the globe, and despite the current risks, the pull of the USA is hard to dismiss. In the Eurozone, for example, the governments would find it difficult to weaponise US assets such as bonds, stocks and shares as most of the ownership is held by the private sector. Another scenario being offered by some analysts is that investors may be choosing to hedge their bets in the United States. This is where investors continue to purchase bonds, stocks, etc., but at the same time hedge their investments by purchasing derivatives, which will protect them against future declines in the US Dollar. This can take the form of selling U.S. dollars forward in the F/EX markets, which can put downward pressure on the greenback despite funds still flowing into the country.

Positive Indicators and Global Dominance

Despite the calls for “Sell America” and de-dollarisation, the outlook on the United States remains somewhat positive. Earnings growth projected by analysts is 14% – 16% EPS  (earnings per share) for the S&P for this year, driven by corporate tax benefits and AI efficiency. US treasuries currently represent 68% of all global sovereign issuance and are still seen as a haven in times of financial markets and geopolitical stress, albeit slightly tarnished at the moment.

Future Outlook for the Reserve Currency

Analysts point out that emerging markets in Asia and Latin America are experiencing heavier inflows of capital as global investors seek to spread risk away from the United States. However, data released shows that the US Dollar accounts for circa 50% of trade invoices for global trade and remains the dominant currency in international transactions. Furthermore, the greenback accounts for circa 88% of all foreign exchange transactions and represents 58% of global foreign exchange reserves, so any thoughts of the USD losing its status as the world’s reserve currency can be put on hold for now. However, analysts have warned that “Sell or Hedge America” will still be uppermost in the minds of overseas investors in the United States.

The Federal Reserve Holds Interest Rates Steady

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

FOMC Holds Interest Rates Steady

Today, and for the first time since July 2025, the Federal Reserve’s FOMC (Federal Open Market Committee) kept interest rates steady between 3.50% and 3.75%. The FOMC voted 10 – 2 in favour of holding rates steady, with the two dissents coming from Governor Waller (a President Trump nominee to replace Fed Chair Powell) and Governor Miran*, both voting for a cut in interest rates of 25 basis points. Post-meeting statements by officials said, “job gains have remained low, and the unemployment rate has shown some signs of stabilisation”. Interestingly, the language that officials used in three previous statements suggested that there were increased downside risks to employment, has disappeared this time around.

Background on Governor Miran

*Federal Reserve Governor Marin – In December 2024, President Donald Trump named Miran as his nominee for chair of the Council of Economic Advisors. He was confirmed by the United States Senate in March 2025. Governor Marin developed the Trump administration’s Tariff Policy, opining that import taxes are not inflationary.

Powell Signals Improving Economic Outlook

After the interest rate announcement, Federal Reserve Chairman Jerome Powell said, “The outlook for economic activity has improved, clearly improved since the last meeting, and that should matter for labour demand and for employment over time”. Recently released data backed up this statement, showing steady employment, accelerating growth, and cooling inflation”. On the growth front, official data released last week for GDP showed an annualised growth of 4.4% for Q3 2025, with some experts suggesting it could reach 5.4% in Q4. 

Political Pressure and Inflation Concerns

Chairman Powell has also noted, “The economy has once again surprised us with its strength, not for the first time.” However, once again, President Trump has hurled insults at Chairman Powell, calling him a moron for not lowering interest rates. The President’s frustration is likely to grow, as experts say Chairman Powell’s comments clearly suggest the FOMC plans to keep interest rates on hold in the coming months. Indeed, the Federal Reserve’s Personal Consumption Expenditures Inflation Gauge, (their preferred inflation gauge),  reflected 2.8% in November 2025 which is nearly a full percentage point above their 2% target, so as some analysts have suggested, this may be another reason to keep rates on hold as the Federal reserve attempt to balance their dual mandate of full employment and price stability.

Market Reaction and What Comes Next

Analysts advise that the reaction by financial markets to the Federal Reserve’s interest rate decision was relatively muted, with traders pricing in two more rate cuts this year, the first cut being expected in June. Indeed, analysts suggest that the statement by officials following the rate decision was on the hawkish side, especially as downside risk to employment was removed from the language and economic activity was reclassified from moderate to solid. This suggests that Chairman Powell may well have presided over his last interest rate cut as he is due to retire on 15th May this year. Global markets are watching with cautious anticipation as President Trump prepares to appoint a rate-cut advocate as the next Chairman of the Federal Reserve. The two dissenters in today’s announcement are Trump appointees, and both Fed Governors are in the frame for selection.

What Happens if the U.S. Supreme Court Rules President Trump’s Tariffs Illegal?

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

President Donald Trump’s tariffs are now subject to a ruling by the U.S. Supreme Court (SCOTUS). On 5th November, the Court heard consolidated oral arguments in Learning Resources Inc v Trump and V.O.S. Selections Inc v Trump, two high-profile cases challenging President Trump’s use of the IEEPA*** (International Emergency Economic Powers Act) to impose global tariffs, specifically the Trafficking Tariffs* and Reciprocal Tariffs**. SCOTUS has agreed to fast-track its decision, expected in late 2025 or early 2026. A ruling against the administration would severely restrict the President’s ability to impose global tariffs and would significantly weaken the White House’s bargaining position in ongoing trade negotiations.

*Trafficking Tariffs – these are recent U.S. import taxes imposed by the Trump administration to address what it declared a national emergency relating to illegal immigration and drug trafficking, particularly fentanyl. The tariffs target goods imported from Mexico, China, and Canada, countries identified as key points in the drug supply chain into the United States.

**Reciprocal Tariffs – these tariffs are designed as a retaliatory or “tit-for-tat” measure, imposing import taxes that match tariffs charged by trading partners. Their main objectives are to correct trade imbalances, level the playing field, and pressure other countries to reduce their tariffs. Earlier this year, President Trump argued that the trade imbalance between the U.S. and many partners was excessive, and therefore imposed punitive tariffs that far exceeded those used by other countries exporting to America.

***IEEPA – the International Emergency Economic Powers Act (1977) gives the President authority to declare a national emergency and regulate international economic transactions in response to external threats. This may include imposing sanctions, freezing assets, or other restrictive measures. Historically, it has been used to counter threats such as terrorism and cybercrime. Under President Trump, however, IEEPA was invoked to justify the imposition of import tariffs, a use now being legally contested.

President Trump has warned that it would be “devastating for our country” if SCOTUS rules against his tariffs, calling the cases “two of the most important in our history”. Experts suggest that an adverse ruling could force the government to pay more than $100 billion in refunds. It would also eliminate much of the leverage the administration currently uses in trade negotiations and could create significant uncertainty in geopolitical discussions with the EU, China, and other trading partners.

If SCOTUS rules for the plaintiffs and strikes down Trump’s use of IEEPA to impose blanket tariffs, the President does retain several alternative legal mechanisms to reintroduce similar measures. These include:

Section 338 of the Tariff Act of 1930, which authorises the President to impose tariffs of up to 50% (or more in certain cases) on countries that take discriminatory trade measures against the U.S. However, there are limitations, including a 50% tariff cap unless discrimination persists and a mandatory 30-day delay in tariff collection.

Section 122 of the Trade Act of 1974 allows tariffs to address a large balance-of-payments deficit. However, there are limitations in which the President can only impose a global tariff of 15% and for a maximum duration of 150 days. This may be less appealing to the current administration.

Section 232 of the Trade Expansion Act empowers the President to impose tariffs on national security grounds targeting specific sectors. There is a no tariff cap imposition or time limit, but it does require an extensive investigation process by the Department of Commerce. This must also be sector-specific, giving the President far less latitude than IEEPA.

While the President has additional legal avenues available, he will be hoping that SCOTUS dismisses the cases and rules in favour of the administration. Analysts note that the Court will need to weigh the increased costs borne by U.S. companies, the impact on America’s global reputation, and whether ruling against the President would diminish U.S. leverage in trade negotiations, geopolitical affairs (including the Russia–Ukraine war and Gaza), and international economic relations.

The Record-Long U.S. Government Shutdown Has Come to an End

Written by IntaCapital Swiss on . Posted in News & Reports, Uncategorized. Leave a Comment

Global shares rose on Monday, 10th November, largely driven by sentiment that the historic U.S. federal government shutdown was finally nearing an end. The day before, on 9th November, the U.S. Senate advanced an agreement that would potentially reopen the federal government and end a shutdown then in its 40th day, which had furloughed federal workers, disrupted air traffic, and delayed food aid programmes.

On Wednesday, 12th November, the Senate voted on a House-passed procedural bill amended to fund the government until 30th January 2026. The Senate passed the measure and sent it back to the House of Representatives, where it was approved the same evening by a vote of 222–209. As in the Senate, Democrats largely opposed the bill because it did not include their key demand: renewal of subsidies for Affordable Care Act insurance policies, which are set to expire on 31st December 2025.

Later that evening, at 10:24 p.m. EST, President Donald Trump signed the legislation into law, officially ending the longest government shutdown in U.S. history (43 days). Experts estimate it may take federal workers until the end of the year to clear the accumulated backlog. Transport Secretary Sean Duffy indicated that current flight restrictions at major U.S. airports could take up to a week to lift. Delta Airlines’ CEO reported that over 2,000 flight cancellations linked to the shutdown will negatively affect the company’s quarterly earnings, with holiday bookings down by approximately 5%–10%.

According to data from the Congressional Budget Office (CBO), the shutdown cost the government USD 3 billion in back pay for furloughed workers and USD 2 billion in lost tax revenue, mainly due to reduced IRS tax-compliance activities. The CBO further estimates that the total impact on the U.S. economy could range between USD 7 billion and USD 14 billion, with Q4 GDP potentially falling by 2% due to reduced government spending. In a letter dated 29th October 2025 to the House Budget Committee, the CBO director noted: “Although most of the decline in GDP will eventually be recovered, the CBO estimates that USD 7–10 billion will not be recovered.”

Federal Reserve officials are now preparing to determine whether to cut interest rates again at their December policy meeting. Unfortunately, limited data availability — due to the shutdown’s impact on the Bureau of Labour Statistics (BLS) and the Bureau of Economic Analysis (BEA) – may hinder their decision-making. However, it is hoped that all necessary data will be available by the meeting on 10th December 2025, unlike the previous meeting on 28th–29th October, when they had only partial data.

The legislation signed by President Trump only funds the federal government until 30th January 2026. This stopgap gives Democrats ample time to renew their demands for the reinstatement of Affordable Care Act insurance subsidies, which will have expired by 31st December 2025. Should lawmakers fail to reach an agreement on this contentious issue, the American public may once again have to brace for another federal government shutdown.

Head office

IntaCapital Swiss SA,
Rue du Rhône 80 - 84,
CH - 1204 Genève,
Switzerland

Other facilities

Enquire

Legal

IntaCapital Switzerland | Copyright © 2025 | All Rights Reserved