Fed Caught Between Rock and Hard Place: Tariff-Driven Inflation vs. Weakening Job Market

Switzerland’s exports to the US rose 1.1% in July, driven by increased gold and watch shipments, just before President Trump imposed a surprising 39% tariff on Swiss goods—the highest among developed nations. Gold exports jumped to their highest level since March, while Swiss watch exports returned to growth, primarily due to US demand. The new tariff affects about 10% of Swiss exports, particularly hitting machinery and technology sectors, though medicines remain exempt for now. Switzerland is urgently negotiating with Washington to reduce the levy while implementing domestic measures to cut production costs. The country’s role as the world’s largest gold-refining

Harvard Management Company made significant portfolio shifts in Q2 2025, most notably adding Bitcoin and gold exposure for the first time. The $51 billion endowment invested $117 million in the iShares Bitcoin Trust ETF and $101.5 million in the SPDR Gold Shares ETF, signaling a move toward alternative assets and inflation hedges. The endowment dramatically reduced its technology sector exposure, cutting Meta holdings by 67%, Broadcom by 40%, and completely exiting Uber and cybersecurity firm Rubrik. However, Harvard showed selective confidence in certain tech giants, increasing Microsoft holdings by 48% and Nvidia by 30%. The fund also returned to Amazon

The U.S. dollar remained flat Thursday as investors await Fed Chair Jerome Powell’s Jackson Hole speech on Friday for policy direction. Markets are pricing in a 79% chance of a September rate cut, down slightly from earlier expectations. President Trump’s renewed attacks on the Fed, including calling for Governor Lisa Cook’s resignation, have raised concerns about central bank independence. The dollar index held steady at 98.337, while major currencies showed little movement despite the U.S.-EU trade deal confirmation with 15% tariffs on most European imports.

Gold futures declined 0.2% to $3,380.90 per troy ounce on Thursday morning, pressured by a stronger U.S. dollar that makes gold more expensive for international buyers. Despite the dip, gold maintained most of its gains from the previous session when it benefited from safe-haven buying during a tech stock selloff. Trading remains thin and prices are expected to stay rangebound until Fed Chair Jerome Powell’s crucial speech on Friday, which investors will analyze for clues about future monetary policy easing.