The global economic landscape is shifting rapidly, driven by new U.S. tariffs and rising interest rate concerns. Under the Trump administration, the U.S. has imposed tariffs on major trading partners like Canada, China, and the EU, aiming to protect domestic industries but also increasing volatility across the global market.
This volatility was further amplified this week, as the U.S. announced plans to impose a new 25% tariff on imported electric vehicles. The move, aimed at protecting American automakers, sparked immediate backlash from trading partners. Beyond the auto sector, these tariffs are driving up costs across supply chains and intensifying inflationary pressures. Federal Reserve Chair Jerome Powell, confirmed that the Fed is in no rush to cut interest rates, citing inflation risks linked to trade policies (New York Post).
For family offices, these shifts are creating both risks and opportunities, particularly in equities, fixed income, and alternative investments.
Investment Adjustments in a Volatile Market
Higher costs for global industries: Sectors reliant on international supply chains, such as automotive, technology, and manufacturing, face higher input costs and margin pressures.
Stronger fixed-income opportunities: With delayed rate cuts, family offices may find bonds and other interest-sensitive investments more attractive.
Private markets recalibrating: Higher borrowing costs are slowing private equity and real estate deals, but niche sectors like infrastructure and energy may remain resilient.
How Family Offices Survive
Diversify beyond exposed industries: Shifting allocations away from sectors hit hardest by tariffs can protect returns.
Actively monitor trade policies: Staying informed on new tariffs, inflation data, and Fed policy changes helps anticipate market movements.
Assess risk in private investments: Rising financing costs impact real estate and direct investments, making strategic reallocation crucial.
Leverage financial technology: AI-powered tools can help track portfolio exposure to tariffs and interest rate shifts in real time.
Tariffs are reshaping family office investments, creating both risks and opportunities. MyFO enables family offices to adapt quickly and make informed decisions in a rapidly changing market.
