Despite the radical change in U.S. trade policy under the presidency of Donald Trump, Mexico remains the main supplier to the world’s largest power and its trading partner within the USMCA.
In June, imports of goods from Mexico totaled 44.8 billion dollars, after a figure of 46.3 billion was reported in the previous month, representing 16.9% of total imports of the world’s largest economy, according to the Economic Report prepared by the Economic Studies Department of Banamex.
For its part, the share of U.S. imports from Canada totaled 11.2%, followed by China with 7.1%. The latter figure is the lowest since February 2001.
Cumulatively, during the first half of the current year, imports from Mexico to the United States amounted to 264.4 billion dollars, a figure 6.3% higher than that recorded in the same period of 2024.
As a result, Mexico’s share of U.S. imports averaged 15.0% in the first half of the year, equivalent to 0.9 percentage points below the share recorded in January–June 2024, while for China and Canada this share was 9.5% and 11.2% respectively, that is 3.2 points and 1.9 points lower than in 2024, respectively.
According to the Banamex report, considering the 12-month moving average of the share in total imports, the increases in March for Switzerland (gold) and Ireland (pharmaceuticals) have dissipated, while Vietnam and Taiwan continue to gain share at the expense of China and Canada, as Mexico has reversed the downward trend it had shown in recent months, thanks in large part to the benefits granted by the USMCA for tariff-free imports.
China, the Most Affected Country
The same report indicates that China is the most affected country by the tariffs. The monthly drop of 4.6% in total U.S. imports of goods in June, after declines of 19.9% in April and 0.1% in May, already includes the entry into force of practically all the tariffs announced by the Trump administration.
Thus, the average tariff actually paid during June was 8.9%, 0.1 points more than in May, or 6.6 points higher than before the imposition of customs duties. In contrast, for Mexico, the effective tariff paid was 4.0%, slightly lower than the 4.3% of the previous month. Meanwhile, China posted an average tariff of 37.4% in June, lower than the 45.6% in May but 26.4 points higher than the 10.9% prior to the tariffs.
Thus, Mexico sold 82.2% of its exports to the United States tariff-free during June. This represents approximately 6.0 points less than before the imposition of tariffs, but it undoubtedly remains by a wide margin the main supplier to this country.
Artificial Intelligence, with its promise of revolutionizing all fronts of the economy, has left an indelible mark on the dynamics of venture capital in the United States. However, although enthusiasm continues to drive venture capital investment to new heights, the gap between large deals – driven by megafunds – and smaller ones is widening, according to a report by Silicon Valley Bank (SVB).
“AI is still the engine of venture capital investment in the U.S., representing 58 cents of every dollar deployed in 2025,” the specialized firm stated in its “State of the Market” report, where it outlined its outlook for the second half of 2025.
In this regard, for professionals at the innovation-focused bank, the word of the moment for the VC fund segment is “bifurcation.”
“Capital raising in the U.S. is on track to reach 56 billion dollars this year, a 21% drop compared to 2024 and the lowest level since 2017. Even so, large funds continue to grow, stretching the very definition of venture investment as we know it,” SVB noted.
In this context, the bank highlighted that unprecedented financings – such as the 40-billion-dollar deal led by OpenAI – are pushing total VC investment amounts to higher levels, but this only benefits the largest businesses. “We see that investment numbers remain stubbornly low for deals under 100 million dollars,” the report stated.
Contrasting Dynamics
Figures compiled by SVB show that, over the last three years, more than 36% of funds raised from VC vehicles have gone to funds of at least 1 billion dollars. In contrast, the proportion was 22% in the 2016–2019 period.
Although megadeals by AI companies are taking total venture capital investment “to the stratosphere,” SVB warned that “you cannot measure the venture economy by the amount of VC being deployed.”
Currently, they point out, nearly two-thirds of VC dollars in the U.S. are allocated to deals over 500 million dollars. In contrast, at the peak of the venture capital boom in 2021, that proportion was only 18%.
On the other hand, SVB emphasized, looking at deals under 100 million dollars, VC levels are on par with the pre-pandemic period. A similar trend is seen in the number of deals, falling from its peak of 1,650 to the 1,150 recorded in this edition of the report.
This shifting dynamic has also affected how megafunds operate. Managers of large strategies – such as Andreessen Horowitz, General Catalyst, and Coatue – are “changing the rules (and the math) of venture capital investing.” Funds are becoming larger and are structured in dynamic ways.
“What is driving these mega-investments? Megafunds, of course,” the report’s authors underlined, adding that the six largest vehicles raising capital since 2021 have participated in deals equivalent to one-third of the VC raised in the last 12 months. This contrasts with the 10% seen at the end of 2024. “The increase is driven almost exclusively by massive AI deals,” they noted.
Funding Rounds
Another phenomenon observed in the fundraising process within the venture capital space is that startups are taking more time to “graduate” from one funding round to the next — at the slowest pace in history, according to SVB’s figures.
“The number of startups graduating to the next series in the past three years has dropped by half compared to 2020, and we don’t believe this will change soon,” the firm stated.
Faced with this particular financing scenario, companies are moving to cover that gap by cutting expenses and focusing on profitability on the one hand, or launching extension or bridge rounds between series on the other.
“With the current median time between rounds, it would take a company ten years to go from seed capital to Series D,” they indicated, which is 45% longer than in 2022. “If this trend continues, it will perpetuate the mass of companies that remain private for longer,” they added.
Another effect, they noted, is that the trend is pushing a variety of early-stage investors to sell their positions in later rounds, so they can return capital to LPs sooner.
One of the latest studies by Vanguard examines the risk of overconcentration in high-cap U.S. stocks and whether, as a result, ETF investors are adjusting the global allocation of their portfolios.
The report reveals that while the market shows a marked tilt toward selected Magnificent Seven companies, Vanguard indicates that advisors may have already adjusted their clients’ portfolios accordingly.
The firm conducted a survey of 1,747 clients, which shows that advisors are already tilting their portfolios toward small- and mid-cap stocks, moving away from large- and mega-cap growth stocks that have experienced a strong rally.
The median among respondents has been overweighting mid and small caps by approximately 10 percentage points above benchmark allocations, which are around 25%.
While advisors appear to be reducing their exposure to large-cap stocks, another critical factor they may be overlooking is the bias toward domestic markets.
Research by Vanguard shows that the median client portfolio has a 75% weighting in U.S. stocks, well above the 63% allocated to American stocks in global benchmark indexes.
That represents an overweight of 12 percentage points, and more than three-quarters of client portfolios show some level of home bias.
Market capitalization indexes risk a greater allocation to a handful of names, which can make exposure seem excessive. Such indexes are arguably the best strategy for holding a representative slice of the broader macroeconomy, but moving away from the highest-returning U.S. companies addresses only one part of a portfolio’s overconcentration source.
Adding more international equities can make portfolios more diversified—a benefit that, according to the study, could prove profitable “if the current valuation gap between U.S. and international stocks normalizes over the long term.”
Donald Trump continues to fulfill his campaign promises. On Thursday, the U.S. president signed an executive order to allow the inclusion of private equity, real estate, cryptocurrencies, and other alternative assets in 401(k) retirement accounts in order “to enable investors to access alternative assets for better returns and diversification,” according to the official statement released by the White House.
The order paves the way for private equity managers and other funds to access the trillions of dollars (American trillions) in Americans’ retirement savings.
“It could open a new and broad source of funding for managers of so-called alternative assets, outside of stocks, bonds, and cash, although critics claim it could also pose an excessive risk to retirement investments,” reported the Reuters agency.
According to Bloomberg, the order is “a big win for industries seeking to tap into some of the approximately $12.5 trillion (American trillions) held in those retirement accounts.”
“The order instructs the Securities and Exchange Commission (SEC) to facilitate access to alternative assets for participant-directed defined contribution retirement plans by reviewing applicable regulations and guidelines,” a White House official stated in the morning under condition of anonymity, according to the cited sources.
The document instructs the Secretary of Labor to reexamine the Department of Labor’s guidelines on fiduciary duties related to investments in alternative assets within 401(k) plans and other defined contribution plans regulated by ERISA. It also instructs the Secretary of Labor to clarify the Department’s stance on alternative assets and the proper fiduciary process associated with offering asset allocation funds that include investments in alternative assets.
Initial Reactions
The new investment options have less stringent disclosure requirements and are generally harder to sell quickly for cash compared to publicly traded stocks and bonds, which most retirement funds rely on. In addition, investing in them usually involves higher fees, Reuters noted.
Many private equity firms are eager for the new source of cash that retail investors could provide after three years in which high interest rates shook their traditional model of buying companies and selling them for profit.
“The entire market cap of the crypto market as a whole is nearly 4 trillion,” Iñaki Apezteguia, a Bitcoin specialist and co-founder of Crossing Capital, told Funds Society. “So the amount of money handled in crypto could triple with this availability of pension funds; it’s a huge advancement,” he added.
The expert clarified that this does not mean all the money would go into crypto. “But globally respected analysts, among them Ray Dalio,” he stated, “say that about 15% of a portfolio’s capacity should be allocated to investing in Bitcoin and cryptocurrencies. So we’re talking about a possible injection of massive institutional capital and allowing many people nearing retirement to access diversification of the money tied to their retirement. Bitcoin further legitimizes its place as a global store of value.”
“The approval of the Genius, Clarify, and anti-CBDC laws, the White House’s crypto report, the appointment of key figures in regulatory agencies who are sympathetic to the financial world and have a pro-crypto outlook, and even his own approach of accumulating cryptocurrencies through his companies, both Bitcoin and Ethereum — Trump’s new order is in line with all of this,” said Apezteguia, referencing his campaign announcements.
In fact, the final lines of the official statement announcing the executive order include references to Trump’s promise to make the United States the “world capital of cryptocurrencies,” emphasizing the need to embrace digital assets to boost economic growth and technological leadership.
Not an Immediate Effect
For plan sponsors, the order does not immediately change existing regulations. Jaret Seiberg, a financial services policy analyst at TD Cowen Washington Research Group, said in a note published by CNN that “agencies will still have to develop new rules. That could take until 2026.”
For their part, employers will have to conduct their own due diligence before offering new investment options. Lisa Gómez, former Assistant Secretary of Labor for Employee Benefits Security, told CNN: “It’s going to be more complicated.”
Private market assets have traditionally been excluded from 401(k) plans due to high fees, lack of transparency, and longer lock-up periods, CNBC noted.
After liberation day, we saw a sharp market correction and a wave of new ETFs with more balanced weighting and improved exposure to certain U.S. stocks and this is because, in the opinion of Sefian Kasem, Global Head of ETF & Indexing Investments Specialists at HSBC AM, the appeal of ETFs lies precisely in their dynamic nature—ideal for these times of uncertainty. We spoke with him about the role of these vehicles in portfolios and about the ETF phenomenon in our latest interview.
How is all this market instability and uncertainty affecting the creation of new ETF products and strategies?
They can be used to quickly increase or decrease risk by investors or to gain access to specific markets or strategies. There is now much more innovation. Active ETFs, for example, offer investors access to asset classes for those seeking the beta of a specific market with an additional alpha component and low tracking error. As markets become increasingly volatile and fragmented, we are more frequently seeing tactical adjustments within portfolios. The great flexibility they provide is precisely what is driving much of the current innovation in the sector, by incorporating new strategies that allow investors to access different sources of risk and return. In the realm of traditional ETFs, concern about concentration in certain stocks within U.S. benchmark indices has also driven innovation around capping methodologies (such as equal weighting) to mitigate concentration risk in the indices.
In this regard, where are ETFs and index strategies heading? How is innovation achieved in this part of the business?
The major shift has been the transition toward increasingly offering exposure to asset classes and access to specific investment strategies. Within the ETF space, you now have the opportunity to invest in strategies that use active stock selection from a bottom-up perspective, whether in a discretionary sense or in a quantitative and systematic sense, where a rule-based methodology is used for stock selection—as is the case with our active ETF range. We’ve spoken in terms of investment strategies, but we also need to consider the evolution of product features, as it is increasingly common for traditional index funds to provide access to strategies through the launch of ETF share classes that operate under the same umbrella. ETF issuers are showing dynamism in this regard, and we are increasingly seeing these hybrid structures in the market, which allow investors to access specific markets or strategies in the usual way through index funds, while also offering access to investors who wish to invest in ETFs, perhaps with a shorter time horizon. They can do this because there is a class that is an ETF, and it is available alongside the traditional non-listed share classes. In short, we are seeing ETF product providers increasingly offer market access to a broader range of asset classes and strategies through more innovative methods.
In the ETF market, we’re seeing strong growth in active ETFs in Europe, but in the U.S., this market is already more developed. What can the European industry learn from how the active ETF segment has grown in the U.S.?
I believe the key lesson from the U.S. experience is the innovation and infrastructure that have been developed there. Historically, they have been pioneers in the creation and growth of the ETF market, including the variety of asset classes offered and the strategies embedded within the structures. The U.S. has gone through a trial phase that proves active investment strategies can be successfully integrated within an ETF. This shows there is enormous potential for growth in Europe, but that doesn’t necessarily mean the same types of strategies will appeal to European investors in the same way they do to Americans. The needs of European investors are different, due to the nature of the investor base. Europe will naturally develop its own range of products demanded by clients, depending on their needs at any given time and tailored to the different jurisdictions.
Considering that active ETFs in the U.S. enjoy a number of advantages not present in Europe, what growth prospects do you see for the active ETF market in Europe? What opportunities could this offer asset managers and, in particular, your firm?
From the U.S. perspective, there are some advantages in that sense, such as a regulatory framework that is a bit more open to innovation, but I believe that mindset is changing in Europe. There is increasing innovation happening in Europe, so there is plenty of room for ETF issuers to develop products that are relevant to their target market. We fully understand that certain concepts are especially relevant to the European public, such as capital-protected solutions, sustainable investing, etc. The creation of products that meet the needs of European investors is something that will likely accelerate from now on, so there may be some divergence from the U.S. as more local innovation takes place. In many respects, I believe much of the innovation is transferable, so we will see many concepts that have taken root in the U.S.—for example, options-based ETFs, such as buffer ETFs, and other types of structured solutions—gradually become more prevalent in Europe.
In which other markets do you see growth potential for the ETF business, both traditional and active?
There is enormous potential for ETFs to become tools used for asset allocation across a wide variety of jurisdictions, in both developed and emerging markets, given how easily they can be used to build and manage portfolios. And this is not only for short-term investors looking for quick access to liquid markets, but also for long-term investors building strategic asset allocations with a 10- to 15-year investment horizon. ETFs can offer them access to different sources of risk premia in both public and private markets, as well as sectoral, factor-based, and thematic strategies. ETFs are becoming a much more important part of portfolios not only in the U.S. and Europe, but also in other jurisdictions—emerging markets, the Far East, the Middle East, Latin America, etc. They are highly relevant tools being used by virtually all types of investors.
HSBC Asset Management has strengthened its presence in the ETF business in recent years. What role do these vehicles play within the firm’s overall strategy?
They play a very important role, as our passive and quantitative equity business is under the same investment leadership (CIO), which greatly helps from an innovation standpoint. In that sense, there is a lot of collaboration and knowledge transfer between the two. The active ETF strategies we’ve launched in the market are considered a natural complement to the range of traditional ETF investment strategies we offer to investors. We will continue to innovate and explore how to use the ETF structure to provide investors with access to selected asset class exposures and strategies—and we have a few more surprises in store for them this year.
The new tariffs from the Trump Administration have come into effect, with a general minimum of 10%, amid renewed social media messages, threats, and moves that add noise to the current context of uncertainty. Markets are absorbing these fluctuations with relative calm, and European stock markets opened the day in positive territory—for example, futures on the STOXX Europe 50 index are pointing to an increase of approximately 0.3%, while in Asian markets, the main indices closed the session with gains.
What does the new “tariff map” look like? According to the summary from Banca March, three main groups can be identified. “On one hand, there are countries in a sort of truce with the U.S., such as Mexico and China, awaiting the outcome of negotiations. Secondly, we have countries like Japan, the United Kingdom, Vietnam, the EU, among others, that have already reached preliminary agreements with the American giant, although in many cases, key details of those pacts are unknown, and in cases like Japan or the EU, negotiations are ongoing. Lastly, there is the rest of the countries which, starting today, will face a tariff ranging from 10%—if they have a trade deficit with the U.S.—up to levels of 50%, in cases like Brazil and India,” they explain.
In this new tariff environment, central banks have become more cautious. “Both the Fed and the ECB have kept official interest rates unchanged. The apparent stability of labor markets and the potential inflationary pressures caused by U.S. tariffs are leading central banks to act with caution. In July, the U.S. administration concluded several tariff agreements with key trading partners (Japan, Eurozone). Although not all details have been negotiated, tariffs around 15% are lower than feared, which has supported risk assets. In the process, equities have once again outperformed fixed income,” highlights Alex Rohner, Fixed Income Strategist at J. Safra Sarasin Sustainable AM.
Chips and Semiconductors
In the past 48 hours, several announcements have come from Trump, adding more percentages and tension to the tariffs that are now in force. In particular, he has announced that he will impose a 100% tariff on chip and semiconductor imports to force their production within the country. “We are going to apply a very high tariff on chips and semiconductors. But the good news for companies like Apple is that if they manufacture in the United States or are fully committed to manufacturing in the United States, no charges will apply to them,” the president stated during an event in the Oval Office.
The Republican, who this week indicated his intention to announce tariffs on these high-tech components, said that “a 100% tariff will be applied to all chips and semiconductors entering the United States.”
According to the analysis by Amadeo Alentorn, Head of Investments in the Systematic Equity area at Jupiter AM, “U.S. technology continues to rely heavily on international supply chains,” as “most advanced semiconductor manufacturing is concentrated in East Asia, especially in Taiwan and South Korea.” Alentorn explains that major U.S. companies like Apple and Nvidia rely heavily on Taiwan for chip manufacturing, even though they design them domestically.
For some experts, this is a clear message to China. U.S. and Chinese delegations concluded a third round of negotiations in Stockholm at the end of July without reaching a definitive agreement, but with a joint intention to extend the tariff truce set to expire on August 12. “Tensions between the U.S. and China are escalating into a full-scale trade war, with technology at its core. President Trump demands that all chips used in critical industries be Made in America. In response to Washington’s tightening of export controls and domestic origin requirements, China is intensifying audits, fines, and new data localization rules. It is suspending licensing and slowing down customs clearance for goods related to semiconductors. Supply chain bottlenecks are multiplying,” adds the expert from Jupiter AM.
Meanwhile, according to experts, the Asian giant is designing a new trade map to diversify its exports within Asia. Its main targets are Southeast Asian countries with friendlier ties to the U.S., such as Vietnam, Thailand, and Indonesia, where results are already visible.
In fact, according to analysis by Crédito y Caución, Chinese exports to the U.S. plummeted in April, when the American tariffs came into effect, with a drop of $9.3 billion in goods exports compared to the previous year. At the same time, Chinese exports to Asia increased by $14.8 billion. This is a trade strategy that aims not only to minimize the impact of tariffs. As Bert Burger, economist at Atradius, explains, “Chinese manufacturers are also setting up production facilities in Southeast Asia to take advantage of local benefits.” These advantages include lower wages and tax incentives.
Pharmaceutical Sector
“We will initially impose a small tariff on pharmaceutical products, but within a year—a year and a half at most—it will rise to 150%, and then to 250%, because we want pharmaceutical products to be made in our country,” stated Trump just 48 hours ago. According to experts, companies in this sector face dual pressure: on one hand, tariffs; on the other, the restructuring of the healthcare system in their largest and most profitable market, the United States. “Pharmaceuticals are included in the trade agreement between the EU and the U.S., which has mitigated some concerns in the sector. However, they were excluded from the recent 39% tariff imposed by the U.S. on Swiss imports. A specific update on pharmaceutical product tariffs is still pending,” say Alexandra Ralli and Simon Lutier, Equity Analysts for the Healthcare Sector at Lombard Odier.
According to Lombard Odier experts, it is important to put this into context: the U.S. healthcare system is undergoing a phase of political reform, with expected changes in production, regulation, and pricing. Furthermore, President Trump has urged major pharmaceutical companies to lower prices, adding pressure to an already strained sector. “Global pharmaceutical giants are trading at a discount compared to their historical averages, reflecting investor caution amid regulatory and political uncertainty.
While the healthcare sector is not among our top picks, we see potential in certain pharmaceutical or biotech companies with strong product pipelines. Swiss pharmaceutical companies could rebound if the tariff framework becomes clearer. In the view of Marie de Mestier, Head of Large-Cap Equity Fund Management at Crédit Mutuel AM, this sector—traditionally considered a safe haven in times of instability—is now in a volatile situation and clearly exposed to political risk. “Donald Trump’s policies will have cross-border repercussions. Possible changes in pricing, regulation, and supply chains, along with increased competition, will force European companies to adapt in order to remain competitive despite U.S. policies. In fact, European pharmaceutical companies generate nearly 50% of their sales in the United States, but not all the drugs they sell are manufactured there. With rising protectionism, the challenge will be to produce more locally, which is why many European pharmaceutical firms have already announced massive investments in the United States,” they emphasize.
India: Energy and Geopolitics
The other major announcement from Trump was the imposition of additional 25% tariffs on India in retaliation for its purchase of Russian oil, bringing the total tariff on Indian imports to 50%. According to analysts, India, the third-largest oil importer in the world, has taken a neutral and pragmatic stance on the war in Ukraine, shifting from importing less than 2% of its oil from Russia to more than one-third, making Moscow its main supplier.
“One of the additional factors negatively impacting the market was President Donald Trump’s decision to impose a 25% tariff on products from India. The measure responds to accusations that the Asian country continues to buy Russian oil, sparking new trade tensions amid an already fragile international relationship,” point out the Financial Markets Analysts for LATAM at XS.com.
In their opinion, despite downward pressures, physical market data offered a bullish signal. “The market is closely watching details on the implementation of U.S. sanctions. Traders are looking to understand which sectors will be affected and whether the measures will have a real effect on global oil supply. At the same time, there is growing concern over a potential production increase by the OPEC+ alliance—which includes Russia—which could offset any supply loss caused by the sanctions,” they add.
Since his arrival at the White House, Donald Trump, President of the United States, has made numerous remarks against Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), as well as the work he is doing. Trump has hinted that he would be willing to remove Powell from his position, while also making indirect suggestions about his desire for lower interest rates. For his part, the Fed Chair remains on the sidelines of such comments and holds firmly to his usual argument: his decisions depend on the data.
In a recent development, Fed Governor Adriana Kugler will leave her post on Friday, August 8, and President Donald Trump is seriously considering naming her successor as the next Fed Chair. “Trump said he will decide on the Fed governor before the end of the week, and that the shortlist for Fed Chair is down to four names: ‘two Kevins and two others’; the odds that White House economic advisor Kevin Hassett becomes the next Fed Chair are rising to 36%, according to Kalshi,” notes Felipe Mendoza, financial markets analyst at ATFX LATAM.
Bloomberg warns that Trump’s advisors may be encouraging the president to appoint a temporary Fed governor to fill the soon-to-be-vacant seat on the central bank’s board. “The departure of Fed Governor Adriana Kugler gives the Republican an early opportunity to appoint a governor more aligned with his preferences. However, market concern about potential passivity from the U.S. central bank—which has been growing since Trump returned to the White House—could worsen depending on whom he selects,” they explain.
According to Tiffany Wilding, economist at PIMCO, and Libby Cantrill, Head of Public Policy at PIMCO, in the short term, while it is likely that Trump will continue criticizing the Fed and advocating for lower rates, it is unlikely that he will try to fire Powell. Instead, they assert, Trump will begin to shape the Fed through upcoming appointments, starting with the expiration of Adriana Kugler’s term in January and Powell’s chairmanship in May — Powell’s term as a Fed governor, distinct from his role as chair, extends until January 2028.
“Whoever Trump selects as the next chair, like any Fed leader, will have to present a credible case for monetary policy decisions, first to gain Senate confirmation and then to secure majority support from the FOMC. As with other U.S. government institutions, the Fed is structured with built-in checks and balances that limit any one individual’s ability to drastically change its policy course,” these two PIMCO experts remind us.
When it comes to candidates or potential successors to Powell, the most frequently mentioned names are: Lael Brainard, Philip Jefferson, Michelle Bowman, and Lisa Cook. “The issue of Powell’s succession crystallizes more than just an institutional debate: it reflects the tension between independent monetary policy and increasing political pressure. In a context where every word spoken by a Fed Chair can influence interest rates and shake markets, the choice of successor will be interpreted as a strong signal of either continuity or change. For investors, the important thing will not be the name, but the direction it takes,” state sources at Mirabaud Wealth Management.
Barriers to Removing Powell
Now then, how realistic is the possibility that Trump could remove Powell? According to Wilding and Cantrill, there are four compelling reasons why Powell will complete his full term. “Despite persistent rumors and occasional threats from the president, we continue to believe that it is highly unlikely that Trump will move to fire Powell before his term ends in May 2026. There are strong legal, political, and practical reasons for this view,” they state.
First, they explain that the most significant barrier to removing Powell is legal: earlier this year, the Supreme Court affirmed the Fed’s special status as a quasi-private institution, whose governors can only be removed “for cause,” a high threshold generally reserved for serious misconduct such as fraud.
“While some Republican lawmakers have attempted to build a case by pointing to cost overruns in Fed building renovations, the Federal Reserve Board has responded quickly with reasonable rebuttals. Powell has also requested an independent review by the Inspector General and has privately indicated that he would challenge any attempt to remove him, likely remaining in his post while the matter is litigated,” note Wilding and Cantrill.
Second, PIMCO experts refer to “political realities.” That is, even if Trump could legally remove Powell, doing so would be politically risky and likely counterproductive. It’s worth remembering that all Fed nominees require Senate confirmation, starting with the Senate Banking Committee. Given the current political landscape, it could be difficult for Trump to gain unanimous support from Republican committee members, especially if the move is perceived as an attack on the Fed’s independence.
Third, as has already been seen, firing Powell could entail significant market risks. “Past speculation about his possible removal has led to higher long-term interest rates and declines in stock markets—outcomes contrary to the administration’s goals. Prominent economists and former Fed officials have warned that such a move could undermine confidence in the central bank, raise inflation expectations, and call into question the unique global standing of U.S. capital markets. The likely consequences: steeper yield curves, higher rates, and a weaker dollar,” both argue.
Finally, PIMCO experts point out that there are a series of institutional checks. They note, “The Fed Chair holds just one of 12 votes on the FOMC, which sets monetary policy. Even if Trump were to install a politically partisan chair, it is far from certain that the rest of the committee would support a dramatic policy shift. It is worth noting that of the current seven members of the Federal Reserve Board of Governors, all of whom vote on the FOMC, only two were nominated during Trump’s first term, while the others were nominated by President Joe Biden.”
According to official figures, at the end of 2020, Mexico had just 947,850 investment accounts. However, by the end of 2024, that figure had surpassed 15 million, reflecting significant progress in democratizing access to the financial market. On the other hand, the country has about 10,000 investment advisors authorized by the Mexican Association of Stock Market Institutions (AMIB), a figure far below what its market requires.
Thus, the growth in investment has not been accompanied by a proportional development of the financial advisory ecosystem in the long term, which continues to face significant challenges in coverage and professionalization, explains GBM in its report “Outlook on Financial Advisory in Mexico.”
For example, Brazil (a market similar in size and culture, despite its higher population density) has 70,000 financial advisors—that is, 7 times more. The difference is abysmal with the United States, where there are between 240,000 and up to 270,000 financial advisors.
“In the last decade, access to financial products has ceased to be a barrier, thanks to the digitalization of the investment ecosystem. The current challenge lies in the strengthening and professionalization of financial advisory, which is essential to boost investments and to help more and more Mexicans achieve their personal goals,” said Luis Felipe Madrigal Mier y Terán, Director of GBM Advisors.
Promoting financial advising as a career of the future is crucial to ensure that investors—both those just starting out and the more experienced—receive the necessary support to make informed and strategic decisions, the firm believes.
According to the study “Investment Habits in Mexico 2023,” 42.3% of Mexicans stated that they do not invest because they consider investment products difficult to understand.
According to preliminary estimates from Swiss Re Institute, global insured losses from natural catastrophes reached 80 billion dollars in the first half of 2025.
This figure represents nearly double the average of the past 10 years and more than half of the 150 billion dollars (in 2025 prices) projected for the entire year, following the long-term annual growth trend of 5-7%. Since natural catastrophe activity is typically higher in the second half of the year, total insured losses for 2025 could, therefore, exceed the projection.
The wildfires that devastated parts of Los Angeles County in January are by far the largest insured loss event from wildfires in history, with estimated insured losses of 40 billion dollars. This exceptional severity was due to a prolonged Santa Ana wind season combined with a lack of rainfall, which allowed the fires to spread rapidly and destroy more than 16,000 structures in an area with one of the highest concentrations of high-value single-family homes in the United States.
Wildfire losses have increased dramatically over the past decade, as rising temperatures, more frequent droughts, and changing precipitation patterns converge with suburban expansion and the concentration of high-value assets. Before 2015, insured losses related to wildfires accounted for around 1% of all natural catastrophe claims. Given that eight of the ten most costly wildfires on record occurred in the last ten years, the share of insured wildfire losses has risen to 7%.
Wildfires are a pervasive hazard in warm, dry regions with large expanses of vegetation, such as those in North America. The primary driver of growing wildfire losses is increased exposure in these hazardous regions. Due to the combination of high risk and concentration of high-value assets, most wildfire losses originate in the U.S., particularly in California, where expansion into hazardous areas has been significant.
Severe Thunderstorms
Severe thunderstorms remain a major driver of losses. Insured losses from severe convective storms (SCS) amounted to 31 billion dollars in the first half of 2025. While several destructive thunderstorms occurred during the year, with large hail and tornado outbreaks in the U.S., total SCS-related losses were below Swiss Re Institute’s trend estimate of 35 billion dollars and the record events of 2023 and 2024. Nevertheless, SCS remain a significant contributor to global insured natural catastrophe losses, and year-to-year volatility underscores their persistent threat to property and infrastructure.
Urbanization in risk-prone areas, the increasing value of assets, and inflation have amplified the financial impact of severe thunderstorms. As exposure continues to rise and reconstruction becomes more expensive, Swiss Re Institute anticipates that losses from this peril will increase over time.
Jérôme Haegeli, Group Chief Economist at Swiss Re, states: “The most effective tool to increase community resilience and safety is to double down on mitigation and adaptation efforts. This is where we can all help reduce losses before they occur. While mitigation and adaptation measures come at a cost, our research shows that, for example, flood protection measures such as levees, dams, and barriers are up to ten times more cost-effective than rebuilding.”
Other examples of adaptation measures include the enforcement of building codes, strengthening zoning laws, enhancing flood protection, and discouraging settlements in hazard-prone areas.
Effects of Global Warming Worldwide
The magnitude 7.7 earthquake that struck Myanmar in March was a human tragedy that caused a high number of fatalities. Shockwaves were felt as far as Thailand, India, and China, resulting in estimated insured losses of 1.5 billion U.S. dollars in Thailand alone.
The second half of the year began with the effects of a large heat dome causing temperatures exceeding 40°C in Western and Central Europe at the end of June, along with wildfire outbreaks in several countries. In the U.S., torrential rains caused catastrophic flash floods in Central Texas in July.
With the U.S. heat hurricane season having passed its peak, attention for the second half of the year shifts to the North Atlantic hurricane season, which typically peaks in early September. Forecasts indicate near or above-average activity, with between three and five major hurricanes, above the long-term average of three.
For insurers and exposed communities, the key factor determining the scale of losses is where a hurricane makes landfall. The 20th anniversary of Hurricane Katrina serves as a reminder that tropical cyclones, particularly major hurricanes, pose a significant risk to the North American East and Gulf Coasts as well as the Caribbean.
For coastal communities, early preparation and resilience are essential to minimize the impact.
Balz Grollimund, Head of Catastrophe Perils at Swiss Re, states: “Reinsurers not only act as shock absorbers against peak risks. They also play a crucial role in helping the world prepare for and respond to the rising risk of natural catastrophes by understanding, quantifying, and transferring risk. Their models and tools pave the way for public and private sector collaborations that provide innovative and practical responses, helping communities recover more quickly.”
Given that 60% of annual insured natural catastrophe losses historically occur in the second half of the year, the upcoming period remains highly uncertain. Losses fluctuate significantly from year to year, with random swings mainly due to natural climate variability. If current loss trends continue, global insured losses from natural catastrophes in 2025 could exceed Swiss Re Institute’s projection of 150 billion U.S. dollars in 2025 prices. However, this outcome still depends on the evolution of major risks in the coming months.
Swiss Re Group is one of the world’s leading providers of reinsurance, insurance, and other insurance-based risk transfer solutions, working to achieve a more resilient world. It anticipates and manages risk, from natural catastrophes to climate change, from an aging population to cybercrime. Swiss Re Group’s goal is to drive societal progress by creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, Swiss Re Group operates through a network of approximately 70 offices worldwide.
The new U.S. legislation—particularly the Genius Act passed in July—is consolidating the role of stablecoins as a method of payment in the future of finance, one of the five megatrends that experts believe will enhance profitability. At BlackRock, they emphasize that stablecoins are linked to major currencies, mainly the U.S. dollar, and could consolidate the greenback’s dominance in global markets, although other countries are exploring alternatives.
Specifically, they are digital tokens tied to a fiat currency and backed by reserve assets. They combine the frictionless transfer inherent to cryptocurrencies with the perceived stability of a traditional currency. Although stablecoins represent only 7% of the crypto universe, their adoption has grown rapidly since 2020, reaching a volume close to 250 billion dollars.
“We believe that the growing demand for stablecoins will have little impact on short-term Treasury yields. We continue to view Bitcoin as a prominent catalyst for profitability,” argues BlackRock in its latest report. In this regard, 2025 has been an exceptional year for Bitcoin, which has risen 25% so far, while the U.S. advances in approving several key laws aimed at integrating digital payments and assets into the traditional financial system—and turning the country into the world capital of cryptocurrencies.
Implications of the Genius Act
In BlackRock’s analysis, there are two main implications of the Genius Act for the U.S. dollar and Treasury bonds. The first is that the law defines stablecoins as a method of payment, not as an investment product; prohibits issuers from paying interest; and restricts their issuance to federally regulated banks, certain registered non-bank entities, and state-licensed companies.
“This regulation could reinforce the dollar’s dominance by facilitating a tokenized digital ecosystem based on the dollar for international payments. In emerging markets, this could provide easier access to the dollar compared to volatile local currencies. However, in advanced economies, adoption could be limited by the prohibition on interest payments, designed to prevent competition with bank deposits and protect the traditional credit system,” they note.
Secondly, they consider that the law also establishes which assets stablecoin issuers can hold as reserves: primarily repurchase agreements (repos), money market funds, and U.S. Treasury bonds with maturities of 93 days or less. “The main issuers — Tether and Circle — together hold at least 120 billion dollars in Treasury bills, representing only about 2% of the total approximately 6 trillion in circulation. This demand could grow as the stablecoin market expands and drive further purchases of short-term bonds. But the impact on yields is likely to be limited,” they qualify.
The U.S. is not the only country taking action. Hong Kong has launched new regulations to attract innovation in stablecoins, and Europe is exploring the digital euro, although its use would be limited to avoid impacting the banking system. “If other countries allow interest-paying stablecoins, or promote central bank digital currencies (CBDCs), this could weaken the dollar’s role in international trade. Nevertheless, the U.S. could respond by also allowing interest on stablecoins,” the report states.
According to experts, this wave of digital asset adoption by governments — through regulatory frameworks and support from the U.S. administration — foretells greater future adoption, which strengthens the investment thesis on Bitcoin as a differentiated driver of risk and returns in portfolios. “Despite this, stablecoins still represent a relatively small part of the crypto universe, and as this ecosystem evolves, it remains unclear how they will compete against other digital assets,” concludes BlackRock.
