US midterm elections, AI, and the Fed

The US midterm election takes centre stage this week, and the outcome will have a big impact on markets for a long time, says Markus Müller, the Private Bank's head of the CIO office and Chief Investment Officer for Sustainability. “The interesting question isn't simply who wins,” Markus says. “It's what the result ultimately means for fiscal policy, US debt, and then finally the bond market.”
In addition to counting ballots, markets also remain preoccupied with the AI buildout – the spending behind it, and signs that it is bearing fruit. “Financial markets are increasingly focused on one fundamental question, which is, will the enormous amount of investments going into AI ultimately be justified by the returns?”, Markus says.
On the data front this week, “the US labour market remains absolutely central”, Markus says, pointing to the monthly US jobs report, but also data on job openings, labor turnover, and a private reading of employment numbers. “Taken together, they can give us a better understanding of what's actually happening in the US labour market.”
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