Peace Talks in Ukraine: A Boost for European Risk Assets and Pressure on Gold

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Throughout August, markets have observed various meetings between the United States, Russia, and the EU aimed at ending the war in Ukraine. This peace negotiation process on the Ukrainian front is expected to carry both economic and financial consequences.

Kim Catechis, Chief Strategist at the Franklin Templeton Institute, explains that for Europe, these negotiations are possibly “the last chance to avoid a war for the survival of the European model,” while for the United States, “it seems that policy direction is solely in the president’s hands and, as such, is not clearly defined for the external observer.”

On this point, Catechis has the impression that, for U.S. President Donald Trump, “reaching a peace agreement is more important than the structure of that agreement, which implies that the sustainability of any peace may not be a priority.” He even considers that “it could be that the President of the United States loses interest and decides to withdraw.”

Still, he notes a few clear considerations. First, that a clear resolution is unlikely in the short term—within six months—and that “an unstable truce” is more probable, along with “little clarity about the outcome of this process.”

On the economic front, Catechis states that the European defense sector is in the early stages of a multi-decade investment boom that will not be affected by any peace agreement in Ukraine. He also believes that Europe’s focus on electrification will continue “regardless of the circumstances, purely for security reasons.” Even in a potential peace scenario where Ukraine does not become another Belarus, it is likely that Europeans will launch a “mini Marshall Plan to rebuild the country,” which would mean “a significant opportunity for local and European companies.”

As for the United States, Catechis does not see clearly how companies will be affected throughout this process. The expert recalls already known figures: $600 billion over three years from the EU, $100 billion from Ukraine—plus revenues from critical mineral extraction. “It’s likely that the majority of these sums will go toward purchasing Patriot missile batteries, but there is a production capacity issue: Raytheon plans to increase production to 12 per year,” the expert notes.

Nicolás Laroche, Global Head of Advisory and Asset Allocation at Union Bancaire Privée (UBP), is clear that a possible peace agreement in Ukraine could have significant implications for various asset classes and sectors, “though this will depend on the details.”

The expert focuses on the future of sanctions on Russian energy. He believes that any easing of sanctions “would further accelerate and expand” the global oil and gas oversupply scenario, which would put downward pressure on energy prices and “benefit European economies such as Germany.”

Among the side effects of a new energy landscape would be a continuation of the disinflationary trend in Europe, which would improve consumer confidence and corporate margins, and trigger “a sector rotation from defensive sectors to more cyclical ones.” Additionally, Laroche believes that since a peace deal would also be an additional catalyst for further dollar weakness, “domestic and cyclical companies in Europe would likely find a catalyst for a revaluation, given their undemanding valuations.”

In summary, “Europe may be tactically attractive,” but Laroche acknowledges that long-term structural growth and political challenges persist, which makes U.S. equities more appealing to him for generating sustained returns.

Lastly, a peace agreement could tilt the European yield curve upward, according to the UBP expert, due to expectations of higher fiscal spending, “a positive environment for the European financial sector.”

Nicolas Bickel, Head of Investment at Edmond de Rothschild Private Banking, also sees opportunities in Europe in the event of a ceasefire in Ukraine. “While caution must prevail, if peace is achieved, it would act as a catalyst for stock markets, particularly for European equities,” the expert states, adding that a definitive ceasefire would result in lower energy prices, which would support European manufacturing activity and industrial company stocks.

However, Bickel does not rule out that the prospects of de-escalation in Ukraine could affect the European defense sector, “as a reduction in deliveries of ammunition and combat vehicles to Ukrainian forces is expected.” Additionally, a more favorable geopolitical context could also put downward pressure on gold prices.

Nonetheless, he believes the correction in both assets would be short-lived, as they benefit from long-term supportive factors: European defense is backed by the €500 billion ReArmEU program, while gold is supported by increased demand from emerging market central banks, which are reducing their exposure to the U.S. dollar in favor of the precious metal.

“At Edmond de Rothschild, we believe that the ongoing negotiations could act as an additional catalyst for European equities, alongside existing factors such as lower ECB interest rates, Germany’s infrastructure plan, and the stabilization of confidence in Europe,” says Bickel, who nonetheless prefers to be cautious. He advises against “drawing hasty conclusions, especially regarding the reconstruction of Ukraine.”

Thomas Hempell, Head of Macro and Market Research at Generali AM (part of Generali Investments), takes a more cautious stance. He acknowledges that hopes for a ceasefire or peace agreement between Russia and Ukraine could provide moderate support for the euro/dollar exchange rate, “as falling oil and gas prices would reduce Europe’s energy import bill.”

However, he points out that energy costs have already moderated and supply has not been disrupted, so he sees it as “unlikely that the negotiations will have a significant impact on the currency market, as they will be overshadowed by the Federal Reserve’s monetary policy.”

On the other hand, he believes that the prospects of reconstruction efforts, to be carried out in the event of a peace agreement, could to some extent benefit the eurozone economy, thereby strengthening European risk assets. However, he observes that the path to a peace deal “remains fraught with significant obstacles,” and given that Russian President Vladimir Putin still holds the advantage on the battlefield, “he has many incentives to keep buying time.”

The euro features prominently in the outlook of François Rimeu, Senior Strategist at Crédit Mutuel Asset Management, in the event of a peace agreement in Ukraine. The expert expects the euro to appreciate. He recalls that at the time of the invasion of Ukraine in February 2022, the euro was trading around $1.15, before falling below parity in October of that year. “A reversal, probably not of the same magnitude, seems to be the most likely scenario,” forecasts the expert, who also considers that the prospect of peace may have already partly contributed to the single currency’s rebound over the past six months.

Global Defined Contribution Pension Plans Warn of Insufficient Retirement Savings

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Many defined contribution pension plans are not convinced that their participants are on the right path to securing sufficient income during retirement and believe that reversing this situation will take several decades, according to a new report by the Thinking Ahead Institute, a global organization dedicated to investment analysis and innovation at WTW.

The Global DC Peer Study 2025, conducted by the Thinking Ahead Institute, brought together 20 of the leading defined contribution pension plans from the APAC, Americas, and EMEA regions. Collectively, these funds manage more than $2.2 trillion in assets, including both public pension funds and private retirement systems.

According to its findings, 60% of the experts surveyed indicated that the main concern for defined contribution pension plans over the next decade is ensuring adequate income during retirement.

These concerns are particularly evident in regions where minimum contribution levels are low or where auto-enrolment systems lead participants to believe they are saving enough without making additional contributions. Some respondents emphasized the need to focus on the adequacy of retirement savings—beyond just coverage or participation—as a key issue for future government reforms.

Although many plans already offer gradual retirement transition paths, many members in the retirement phase continue to make late decisions with a tactical rather than strategic approach. Some of them are exploring collective defined contribution schemes or hybrid models that combine flexibility with sustainable income, though such cases remain rare.

The study also revealed that alternative investments now represent, on average, 20% of pension plan allocations, equaling for the first time the allocation to bonds. Equities, meanwhile, make up the remaining 60%. This shift, though quiet, reflects a significant evolution in the investment strategies of defined contribution plans, especially in mature markets such as Australia. Despite the challenges that private markets pose in terms of governance and communication, this move reflects the growing conviction that long-term returns must be maximized, given the limited effectiveness of traditionally bond-heavy portfolios.

A recurring issue among the plans analyzed is the concern that current lifecycle designs are underperforming, especially due to overly conservative asset allocation in the early stages of accumulation. Some plans are considering dynamic risk budgets that adjust over time or the use of leveraged equities for younger cohorts to improve long-term outcomes.

Others are reevaluating decumulation strategies altogether, seeking to better align them with members’ evolving capacity to take on risk. Additionally, the concept of liability-driven defined contribution, similar to defined benefit schemes, has been proposed as a potential future design alternative.

“In many parts of the world, defined contribution systems are now the dominant pension model. However, they remain relatively young and have not reached full maturity, which presents challenges such as income adequacy in retirement, participation rates, and contribution levels,” says Tim Hodgson, co-founder of the Thinking Ahead Institute.

In his view, as the defined contribution system matures, there is a growing focus on the decumulation phase and on lifelong, integrated solutions. “Some countries are further along in this process than others. Most defined contribution plan participants have several decades to secure an adequate pension. However, there are only two fundamental ways to improve retirement adequacy: increasing contributions and generating higher long-term investment returns,” he adds.

According to his analysis of the report, there is a growing consensus that current lifecycle designs in defined contribution plans may be missing out on return opportunities, particularly due to insufficient risk-taking in the early accumulation phase. “However, in the most essential aspect of retirement saving, further progress is needed. Maximizing returns is crucial, but it has limits.

In many markets, most savers need to increase their contributions during the accumulation phase. While financial education may help, it will ultimately be up to governments to determine whether contributions to defined contribution plans are truly sufficient to ensure a dignified retirement for all future pensioners,” Hodgson notes.

In conclusion, Oriol Ramírez–Monsonis, Head of Investments at WTW, emphasized that “Spain is at a crucial moment to consolidate its defined contribution pension plans, considering that only about 25% of workers participate in complementary private systems—approximately 15% in individual plans and 10% in collective plans. We have the opportunity to incorporate best practices observed globally to design a system that ensures long-term sustainable pensions, focusing on strengthening savings capacity and optimizing risk management.”

Trump Dismisses Fed Governor Lisa Cook With “Immediate Effect”

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Trump dismisses Fed Governor Lisa Cook
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U.S. President Donald Trump announced the dismissal of Federal Reserve Governor Lisa Cook over alleged irregularities in obtaining mortgage loans. This unprecedented decision could test the limits of presidential power over the independent monetary policy body if challenged in court, according to Reuters.

Trump stated in a letter addressed to Cook—the first African American woman to serve on the Fed’s governing board—that he had “sufficient grounds to remove her from office” due to Cook’s declaration in 2021, in documents related to separate mortgage loans on properties in Michigan and Georgia, that both properties were primary residences in which she intended to live.

The U.S. president accused Cook in the letter of having engaged in “deceptive and criminal conduct in a financial matter” and said he no longer trusted her “integrity.”

“At a minimum, the conduct in question demonstrates the kind of negligence in financial transactions that calls into question her competence and reliability as a financial regulator,” he said, asserting his authority to dismiss Cook under Article 2 of the U.S. Constitution and the Federal Reserve Act of 1913.

Cook’s Response


Cook responded in a statement emailed to journalists via attorney Abbe Lowell’s law firm, saying that Trump “has no legal grounds or authority” to remove her from the post to which she was appointed by former president Joe Biden in 2022. “I will continue performing my duties to support the U.S. economy,” the statement from Cook read.

Lowell, for his part, stated that Trump’s “demands lack any proper process, basis, or legal authority. We will take all necessary steps to prevent this attempted legal action.”

Questions about Cook’s mortgages were first raised last week by the director of the U.S. Federal Housing Finance Agency, William Pulte, who referred the matter to Attorney General Pamela Bondi for investigation.

Although Fed governors’ terms are structured to outlast any given president’s term—and Cook’s runs until 2038—the Federal Reserve Act allows for the removal of a sitting governor “for cause.”

This provision has never been tested by presidents who, particularly since the 1970s, have largely taken a hands-off approach to the Fed in order to preserve confidence in U.S. monetary policy.

Legal scholars and historians say the web of issues that could arise in a court challenge would include questions related to executive power, the Fed’s unique and quasi-private nature and history, and whether Cook’s actions constituted grounds for removal.

Trump’s Pressure


Trump has repeatedly criticized Powell for not lowering interest rates, although he has stopped short of threatening to fire him from a post that, in any case, ends in just under nine months.

Last week, his attention turned to Cook, whose removal would allow Trump to select his fourth nominee to the Fed’s seven-member board, including Governor Christopher Waller, Vice Chair for Supervision appointed during his first term, and the pending nomination of Council of Economic Advisers chair Stephen Miran to a currently vacant seat.

Cook took out the mortgages in question in 2021, when she was an academic. A 2024 official financial disclosure form lists three mortgages in Cook’s name, two of them for personal residences. Loans for primary residences may carry lower interest rates than mortgages for investment properties, which banks consider riskier.

Reaction

U.S. President Donald Trump announced the dismissal of Federal Reserve Governor Lisa Cook over alleged irregularities in obtaining mortgage loans. This unprecedented decision could test the limits of presidential power over the independent monetary policy body if challenged in court, according to Reuters.

Trump stated in a letter addressed to Cook—the first African American woman to serve on the Fed’s governing board—that he had “sufficient grounds to remove her from office” due to Cook’s declaration in 2021, in documents related to separate mortgage loans on properties in Michigan and Georgia, that both properties were primary residences in which she intended to live.

The U.S. president accused Cook in the letter of having engaged in “deceptive and criminal conduct in a financial matter” and said he no longer trusted her “integrity.”

“At a minimum, the conduct in question demonstrates the kind of negligence in financial transactions that calls into question her competence and reliability as a financial regulator,” he said, asserting his authority to dismiss Cook under Article 2 of the U.S. Constitution and the Federal Reserve Act of 1913.

Cook’s Response


Cook responded in a statement emailed to journalists via attorney Abbe Lowell’s law firm, saying that Trump “has no legal grounds or authority” to remove her from the post to which she was appointed by former president Joe Biden in 2022. “I will continue performing my duties to support the U.S. economy,” the statement from Cook read.

Lowell, for his part, stated that Trump’s “demands lack any proper process, basis, or legal authority. We will take all necessary steps to prevent this attempted legal action.”

Questions about Cook’s mortgages were first raised last week by the director of the U.S. Federal Housing Finance Agency, William Pulte, who referred the matter to Attorney General Pamela Bondi for investigation.

Although Fed governors’ terms are structured to outlast any given president’s term—and Cook’s runs until 2038—the Federal Reserve Act allows for the removal of a sitting governor “for cause.”

This provision has never been tested by presidents who, particularly since the 1970s, have largely taken a hands-off approach to the Fed in order to preserve confidence in U.S. monetary policy.

Legal scholars and historians say the web of issues that could arise in a court challenge would include questions related to executive power, the Fed’s unique and quasi-private nature and history, and whether Cook’s actions constituted grounds for removal.

Trump’s Pressure


Trump has repeatedly criticized Powell for not lowering interest rates, although he has stopped short of threatening to fire him from a post that, in any case, ends in just under nine months.

Last week, his attention turned to Cook, whose removal would allow Trump to select his fourth nominee to the Fed’s seven-member board, including Governor Christopher Waller, Vice Chair for Supervision appointed during his first term, and the pending nomination of Council of Economic Advisers chair Stephen Miran to a currently vacant seat.

Cook took out the mortgages in question in 2021, when she was an academic. A 2024 official financial disclosure form lists three mortgages in Cook’s name, two of them for personal residences. Loans for primary residences may carry lower interest rates than mortgages for investment properties, which banks consider riskier.

Reactions


It remains unclear how events will unfold from here, as Trump has stated the dismissal is effective immediately and the Federal Reserve’s next meeting is scheduled for September 16–17.

President Trump’s decision caused a movement in the U.S. fixed income yield curve, as yields on two-year bonds—sensitive to short-term monetary policy expectations—fell sharply, while yields on ten-year bonds—sensitive to inflation risks—rose significantly.

The market reaction reflects expectations that the Fed could lower interest rates, but at the cost of its commitment to control inflation.

Some firms have already weighed in on Trump’s decision to fire Cook. For example, economist and Fortuna SFP founder José Manuel Marín Cebrián commented that Trump is establishing “true state capitalism” in the U.S., “with a focus against the central bank.” He stated that “Powell’s days are numbered,” adding that Trump has refrained from dismissing him before his term ends but is “actively preparing his replacement” and even “plans to announce the next Fed chair before Powell’s term ends in May to gain time.”

It remains unclear how events will unfold from here, as Trump has stated the dismissal is effective immediately and the Federal Reserve’s next meeting is scheduled for September 16–17.

BTG Pactual Expands Its International Account With Instant Exchange and Digital Custody Transfer

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BTG Pactual expands international account
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BTG Pactual announced new features for its international account, aimed at Brazilian investors interested in the offshore market. The bank now offers instant conversion from dollars to reais and the possibility to transfer asset custody abroad directly through the app.

According to the bank, requests for full or partial custody transfers can now be made digitally and securely, thanks to artificial intelligence for the automatic reading of the required statements.

This technology aims to simplify the process. Advisors can also send push notifications with ACAT requests, streamlining the transfer process.

Another new feature is the exchange solution with near-instant settlement. Dollar-to-real conversions can be made on business days between 9:15 a.m. and 5:00 p.m.

BTG’s international account, launched at the end of 2023, is 100% digital and uses the same investment and banking app. With a minimum exchange amount of 5 dollars, the platform offers access to more than 5,000 equity assets, such as stocks, ETFs, ADRs, and ETNs, as well as over 1,000 fixed-income securities and 400 investment funds.

“The development of our international platform continues at a fast pace, prioritizing client convenience, autonomy, and security. We want to ensure that Brazilian investors have access to the best experience to operate globally, with cutting-edge technology and comprehensive solutions,” said Marcelo Flora, partner responsible for BTG Pactual’s digital platforms.

Diagonal Investment Office Adds Eduardo Rehder as Wealth Management Senior VP

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Diagonal Investment Eduardo Rehder
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The boutique family office based in the United States with global backing and focused on Latin American clients, Diagonal Investment Office, adds Eduardo Rehder in Miami as senior VP wealth management, according to a post by the firm on LinkedIn.

“Talent and vision make the difference,” begins the post on the professional social network. “We are pleased to welcome Eduardo Rehder as a new member of our team,” it continues.

The company states that Rehder’s career “combines entrepreneurship, corporate banking, and wealth management, backed by a solid academic background at Universidad del Pacífico, UCLA Anderson, and the University of Miami.”

The professional also wrote on the same social network that he is “excited” to join Diagonal Investment Office “to support more families in managing their investments, with an objective and independent approach, free of conflicts of interest, and always prioritizing efficiency, diversification, and a long-term vision.”

Rehder holds a degree in Business Administration from Universidad del Pacífico in Peru, a Master’s in Finance from the University of Miami Herbert Business School, and an MBA from UCLA Anderson School of Management. He also holds the FINRA Series 65 license and has 15 years of experience in corporate banking and wealth management, combined with entrepreneurial ventures such as Pigal S.A.C., a company he co-founded and where he served as CEO.

“At Diagonal, we believe in protecting families’ legacies, generating sustainable value, and building tailored solutions that transcend generations. Eduardo’s experience and perspective reinforce this purpose and allow us to continue supporting our clients with a global vision and a deeply personalized approach,” concludes the LinkedIn post from the firm welcoming the professional.

Powell Follows the Script in Jackson Hole by Opening the Door to a Rate Cut in September

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Powell Jackson Hole rate cut
United States Federal Reserve

The most anticipated event of the week, the central bank symposium held this weekend in Jackson Hole (Wyoming), did not disappoint. In the most highly awaited speech, Jerome Powell, Chair of the Federal Reserve, signaled a potential interest rate cut, which would be the first under the Trump administration.

Commenting on Powell’s remarks, Richard Clarida, Global Economic Advisor at PIMCO, noted that the presentation of the revised monetary policy framework “did not disappoint markets, nor did it surprise Fed watchers,” as the U.S. central bank “appears to be on track to lower short-term interest rates, albeit with a cautious approach.” He considers the changes to the policy framework “sensible and well communicated,” while also highlighting “the Fed’s unwavering commitment to its mandate.”

For his part, Nabil Milali, Multi-Asset and Overlay Manager at Edmond de Rothschild AM, emphasized that before the conference, Powell faced the dual risk of disappointing investors hoping for a shift toward more accommodative policy and undermining the central bank’s credibility by appearing to yield to political pressure from U.S. President Donald Trump. However, the expert believes Powell struck “the difficult balance of opening the door to a rate cut at the September meeting, without at the same time fueling doubts about the Fed’s independence,” through two actions: generally well-measured communication and clear reasoning for future moves.

Milali pointed out that Powell stated that despite recent statistics suggesting an acceleration of inflation in both goods and services, he still considers tariff-related inflationary pressures to be only temporary. Additionally, he noted that the labor market is in a “particular situation,” marked by a decline in business demand as well as a drop in the supply of workers, meaning the unemployment rate “is not yet at alarming levels.”

Even so, the expert highlighted that although Powell’s remarks sparked strong risk appetite across asset classes—as evidenced by the narrowing of high-yield spreads and gains in U.S. equity prices—“the Fed’s decision remains heavily dependent on upcoming inflation data and, above all, employment figures, the latter being more than ever the true arbiter of U.S. monetary policy.”

Meanwhile, Bret Kenwell, U.S. investment analyst at eToro, acknowledged that prior to the symposium, markets were pricing in roughly a 75% probability of a U.S. interest rate cut in September. “Those odds should rise significantly following Chair Powell’s comments in Jackson Hole,” he said, explaining that investors got the response they were hoping for when Powell stated that current conditions “could justify an adjustment to our [restrictive] stance.”

However, Kenwell is also aware that the Fed is in a “difficult position,” with rising inflation and signs of deterioration in the labor market. “As economists have observed in the most recent data, the labor market can change quickly—a risk the Fed is highly aware of,” he noted.

Kenwell explained that if the Fed cuts rates too much or too soon, “it risks stoking the fire of inflation.” Conversely, if it moves too late or too mildly, “it risks deeper deterioration in the labor market and, consequently, the economy.” He concluded that “this delicate balance is precisely why the Fed finds itself in a difficult position.” That said, he has no doubt that once inflationary pressure affects employment, “the Fed is likely to step in to prevent further weakness in the labor market,” and that “it is unlikely the committee will stand by idly if we see further labor market weakness.”

The issue of Federal Reserve independence loomed in the background. In fact, Luke Bartholomew, Deputy Chief Economist at Aberdeen, believes that “the elephant in the room in Jackson Hole was the Trump administration’s attacks on the Federal Reserve.” At this point, he recalled that Powell emphasized the importance of monetary policy independence, but the expert is convinced that “Trump’s influence over central bank decisions is likely to increase from here.”

According to Bartholomew, “all signs point to the Senate attempting to appoint Stephen Miran to the Fed before September, where he would likely vote in favor of even more aggressive stimulus than the currently expected 25 basis points.” He also considers it possible that if the administration succeeds in removing Lisa Cook from her post, “another seat would open up.” Consequently, the Aberdeen economist stated, “Powell’s authority could begin to erode in the coming months, with markets paying increasing attention to the preferences of his potential successor. This could make it harder to anchor inflation expectations in a context of rising prices and add pressure on long-term Treasury yields.”

The Taylor Rule Under Debate


Beyond Powell, the most relevant contribution to the conference came from a presentation by Emi Nakamura, professor at the University of California, Berkeley, according to Karsten Junius, Chief Economist at J. Safra Sarasin Sustainable AM. In her speech, Nakamura explained why the Taylor Rule has performed poorly since 2008 and why it should not be strictly applied going forward—the Taylor Rule suggests that interest rates should rise more than proportionally to inflation.

Nakamura explained why and under what circumstances that is not necessary, allowing central banks to disregard certain potentially temporary shocks. A key factor, as the expert recalled, is how well-anchored inflation expectations are, “which in turn depends on the credibility of the central bank.” In her remarks, she warned that “the high degree of credibility is due in part to the Fed’s strong track record, but also to institutions such as central bank independence. These are valuable assets that can be destroyed much faster than they were built.”

What Does the Historic Rise in Public Debt Mean for the Dollar and Bonds?

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Public debt impact dollar bonds
Photo courtesyPeder Beck-Friis, economist at PIMCO

In a recent analysis, Peder Beck-Friis, economist at investment management firm PIMCO, warned about the sustained rise in public debt in G7 countries, highlighting its implications for the U.S. dollar and long-term Treasury yields. According to Beck-Friis, current debt levels are approaching historic highs last seen at the end of World War II.

In his view, these surges have been driven by recent crises such as the 2008 global financial recession and the COVID-19 pandemic, which forced governments to implement extraordinary fiscal measures. “Public debt in advanced economies has followed an upward trajectory for more than a decade, and in the case of the United States, projections from the Congressional Budget Office (CBO) suggest a potential rise to 200% of GDP by 2050 if no changes are made to current fiscal policy,” the analyst warned.

The Dollar Remains Firm, for Now


Despite the concerning trajectory of U.S. debt, Beck-Friis believes the dollar will maintain its status as the dominant reserve currency in the coming years, thanks to its central role in global trade and finance. Currently, nearly 88% of foreign exchange transactions worldwide involve the dollar. “The lack of viable alternatives strengthens the dollar’s position, although the sustainability of this advantage will depend on how the U.S. fiscal outlook evolves,” the economist noted.

Another key point of the analysis is the growing weight of interest payments within the U.S. federal budget. Historically, this type of pressure has led to episodes of fiscal consolidation, as occurred after World War II and again in the 1980s and 1990s. Beck-Friis believes a similar scenario could repeat if financing costs continue to rise.

Finally, the analysis suggests that there is a (though weak) relationship between the rise in public debt (excluding debt held by the Federal Reserve) and a higher term premium on 10-year Treasury bonds. This could result in a steeper yield curve, which would have significant implications for asset managers and the valuation of fixed-income instruments. “The accumulation of public debt could lead investors to demand higher yields on long-term bonds as compensation for future fiscal risk,” Beck-Friis concluded.

Private Debt Attracts Latin Americans: Nearly Two-Thirds Plan to Increase Their Exposure

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Private debt Latin Americans
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The trend of growing interest in private markets has made its mark across the board and shows no sign of slowing down. Latin America is no exception, according to a recently published survey by the specialized information platform Preqin, with a particular appetite for private debt.

These two asset classes, revealed the Latin America Investor Survey for this year, are attracting the most interest among regional investors. When asked which assets they expect to increase their exposure to in the next 12 months, 60% said they anticipated strengthening their bet on private debt.

This was followed by private equity—another area of high interest for Latin American investors of all sizes—with 40%. To a lesser extent, the region is also looking at infrastructure, with 41% expecting to increase their position in the asset class.

These three categories are, in fact, where investment professionals in the region see the main opportunities in Latin America over the next 12 months. Some 58% see greater appeal in private debt, while 46% pointed to private equity and infrastructure.

Regarding the geographic composition of portfolios, the Preqin survey revealed that home bias continues to prevail. Some 67% of the professionals surveyed indicated that Latin America—particularly Brazil and Mexico—offers the best investment opportunities for the next 12 months. This is followed by North America (43%), marking a sharp contrast with the 2024 survey, when 79% preferred the northern region.

Strong International Results


Despite the local bias in terms of future opportunities, when measuring satisfaction with asset performance, foreign portfolios are the clear winners, according to Preqin’s analysis. When asked about the expectations/results balance across various asset classes, investors in the region appear more satisfied with their international portfolios than with their local ones.

Once again, private debt receives the most praise. Some 38% of respondents indicated that their private debt assets exceeded expectations. In contrast, only 22% were surprised by the performance of their domestic private debt portion.

In the case of private equity, 18% saw their international portfolio outperform expectations, compared to just 9% who said the same about their local investments in this asset class.

The exception to the enthusiasm was the real estate investment segment, where none of the investment professionals surveyed saw their portfolios—whether domestic or foreign—exceed expectations.

Despite the strong results, Latin American investors have certain criticisms of foreign managers offering these types of strategies, particularly regarding sector expertise. Looking at the segment of international GPs, 47% of the professionals surveyed by Preqin indicated that the lack of focused experience was the most common mistake among international managers.

Clear Trail Advisors RIA Is Born in Houston, With $850 Million in AUM

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Tendencias salud fondos inversión
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Clear Trail Advisors officially announced its transition to independence through a strategic partnership with Dynasty Financial Partners. The agreement will provide operational and administrative support, strengthen its investment capabilities, incorporate advanced planning and reporting tools, and position the firm for long-term growth, according to a statement released by Dynasty.

Formerly part of Steward Partners, Clear Trail Advisors is based in Houston and manages $850 million in client assets. The firm is led by its Chairman Randy Price, CEO Matt Price, and Matthew Kerns as President.

Dynasty allows us to maintain fiduciary independence while gaining access to top-tier research, technology, and operational support,” said Randy Price.

The decision to become independent reflects the team’s commitment to objective advice and stronger client service, the statement noted.

As part of its new phase, Clear Trail is implementing improvements in planning, faster performance reporting, and a more proactive client relationship. The firm selected Charles Schwab as its custodian, highlighting its scale, stability, and strong presence in Texas.

Clear Trail Advisors serves a clearly defined client base, has strong leadership, and is deeply committed to independent, client-centered advice,” said Shirl Penney, Founder and CEO of Dynasty Financial Partners.

The new RIA plans to expand its service model over the next two years by hiring a Director of Financial Planning and adding in-house tax experts, according to the announcement.

Stablecoins Could Become the Largest Offshore Market, Surpassing the Eurodollar

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Vanguard ahorro hogares OCDE
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Stablecoins, cryptocurrencies generally pegged to the U.S. dollar and designed to maintain a stable value, are establishing themselves as a key player in the global financial system. According to an analysis by Jeffrey Cleveland, Chief Economist at Payden & Rygel, this type of digital asset could become the world’s largest offshore market, even surpassing the historic eurodollar market.

In his latest report, Cleveland draws a parallel between the rise of stablecoins in the 21st century and the expansion of eurodollars after World War II. While eurodollars (offshore dollar deposits) helped consolidate the dollar’s dominance internationally, stablecoins could amplify that hegemony in the digital environment. “Could stablecoins further reinforce the dollar’s status as the world’s leading currency? History suggests they could,” the economist posits.

Evolution of Offshore Dollars


He explains that the eurodollar phenomenon dates back to the mid-20th century, when various regulatory and geopolitical conditions led to a growing accumulation of dollars outside the U.S. In the 1970s, the market quintupled, and by the late 1980s, it already totaled $1.7 trillion in offshore deposits. Today, the eurodollar market is estimated to reach $16 trillion.

In his view, stablecoins follow a similar logic, though with a radically different infrastructure. Instead of being managed by banks outside the U.S., they are stored and transferred via public blockchains. Their market value is already approaching $250 billion, with daily trading volumes exceeding $24 billion, nearing that of Bitcoin and surpassing Ether.

“Unlike traditional cryptocurrencies, stablecoins aim to minimize volatility and are mostly backed by real assets. Currently, more than 95% of them are secured by financial instruments such as cash, Treasury bills, or money market assets. Issuing companies like Tether and USD Coin already rank among the top holders of U.S. Treasury debt, with more than $120 billion in sovereign bonds,” Cleveland notes.

Transforming the Global Payment System


Cleveland’s analysis highlights that stablecoins not only replicate many of the functionalities of eurodollars, but also offer competitive advantages that could accelerate their global adoption. These advantages include the ability to conduct transactions with immediate settlement, available 24 hours a day, seven days a week, independent of traditional banking hours. They also offer significantly lower transfer costs, often below three percent and, in some cases, even below one percent of the amount sent.

Added to this is a high level of transparency, as all transactions are recorded in real time on the blockchain, allowing traceability for both users and regulatory authorities. Furthermore, their accessibility far exceeds that of traditional financial systems: anyone with internet access can use stablecoins without intermediaries or bank accounts, opening the door to broader and more global financial inclusion.

These features have already been adopted by the private sector. For example, SpaceX uses stablecoins to collect payments for its Starlink satellite network services. In the past year, the average monthly transaction volume in stablecoins exceeded $100 billion, even surpassing the volume processed by the Visa payments network.

In addition, stablecoins are being used in the decentralized finance (DeFi) market to generate interest, often higher than what traditional banks offer.

Into the Unknown


Cleveland warns that, like eurodollars, stablecoins could pose macroeconomic challenges in the event of liquidity strains or crises of confidence. In 2008, the eurodollar system was one of the focal points of the global financial crisis, due to the pressure to quickly convert offshore deposits into “onshore” dollars.

However, the rise of stablecoins also represents a historic opportunity to strengthen the dollar’s dominance in the digital economy. Despite past efforts by governments to reduce the global influence of the dollar, Cleveland argues that these digital currencies could further deepen its global presence.

“We’ve seen this movie before. Eurodollars cemented the dollar as the hegemonic currency in the 20th century. Today, stablecoins may be writing a new chapter in that same story,” the economist concludes.