The economy and markets can be felt dizzy and constantly changing. That’s where we can help. Fisher Investments’ “Review of the Week” is a weekly segment designed to highlight some things you may have missed this week, what it means for financial markets, and why it’s important for investors like you.
This week we cover:
US House of Representatives Discussion Pro-Debate Laws US Q2 2025 Revenue Season Trump, Powell & Fed Latest Season on “Independence”
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Transcripts
Matthew White:
Hello, welcome to this week’s review. This weekly segment is designed to highlight some of the key developments that you may have missed this week, what it means for the market, and most importantly, potential impacts for investors. To stay up to date with the latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. So let’s take a look at what happened this week.
First, Crypto Week.
This week, Congress went ahead with several cryptographic measures aimed at establishing a clearer regulatory environment and increasing consumer protection. Hopes for broader adoption and acceptance of cryptocurrencies are pushing Bitcoin prices to their highest ever-highs in recent years. These developments may have many investors wondering whether cryptocurrencies should be part of a broader investment strategy. Diversification is an important principle of investment, but we believe it is more valuable to blend your risk and return profile in line with your long-term goals, cash flow needs and tolerance for temporary declines. Currently, Bitcoin’s risk and return behavior does not have historical data to effectively compare it with traditional asset classes such as stocks and bonds. From our perspective, cryptocurrencies behave like speculative goods such as gold due to their high volatility and lack of clear basic drivers. Given that these assets often experience dramatic booms and bust cycles, skilled market timing is required to ensure profits. We do not automatically rule out investment options, but we believe that stocks and bonds are more suitable for most investors who are aiming to meet their long-term financial goals.
Next is the second quarter revenue season.
The second quarter revenue season won Steam this week, with six largest US banks reporting their second quarter results. Over the financial sector, early results show increased resilient consumer spending and investment banking activity. However, concerns continue that continuing tariff uncertainty could weaken lending activities in the short term. Nevertheless, we believe that financial companies, particularly non-US banks, are well positioned to lead in this bull market. Lending and credit trends remain important indicators for understanding economic health, and a survey of senior lenders in the second quarter in May shows that there will be a slight acceleration in lending growth in the coming months. However, recent data suggests that businesses and financial institutions are still cautious due to prolonged tariff uncertainty. And while we believe that finances should continue to work well in this bull market, we believe that non-US banks are likely to be better than their US counterparts in the near future.
Finally, the future of Fed Chairman and the Fed independence.
You may have seen more headlines swirling this week about President Trump and Federal Reserve Chairman Jerome Powell. Speculation on Wednesday suggested that the president may be considering firing Powell. However, on Thursday, the president described the move as “very unlikely.” What does this mean for the market and investors? In our view, it’s not that much. First, the market had little response. In fact, the S&P 500 rose by about 0.3%, above 0.5%, after the market approached Wednesday and Trump returned the threat of eliminating Powell on Thursday. And firing a Fed chair is not easy. Legally, the president will need a “cause” to justify such a move, and policy disagreements such as differences in interest rate reduction should not meet that standard. Even the Supreme Court recently said that firing the Fed chair without a reason would probably be unbearable due to the Fed’s unique structure designed to protect its independence. Some debates about potential causes are very unlikely to end Powell’s term, particularly within a year, due to the time and process involved in such attempts. Ken Fisher, founder and co-investment director of Fisher Investments, shares it in a recent video linked in a recent video. This embedded structure helps monetary policy be guided by economic goals rather than politics. Take it home? The market is stable, the volatility remains low, and it is a sign that investors understand that they are being built to handle these kinds of political uproars. The Fed’s focus on targeting both inflation and employment is protected by Congress and creates checks and balances that promote stability. Don’t forget that the market is looking ahead and priced corporate revenues and economic trends three to 30 months into the future. And now, based on our analysis, its long-term outlook remains healthy.
That’s it this week!
Thank you for tuning this week’s review. If you’re looking for more insights, don’t miss out on our other series, the three things you should know this week, which releases every Monday. You can also visit FisherInvestments.com at any time for up-to-date thoughts on the market. Thank you for participating in us.
