Monthly letter February 2025

Key events

This month, rather than talking about key events, it is more appropriate to speak of a single, undisputed protagonist. The global stage has been dominated by Donald Trump, who has monopolized discussions in the markets, international politics, traditional media, and social media (which he extensively uses).

Since his return to the White House on January 20, his actions have quickly polarized global interest, with direct impacts on the economy, geopolitics, and financial expectations.

From his first executive orders to foreign policy decisions, as well as his economic vision and relations with financial institutions, every significant development has revolved around the new U.S. President. It has not been a month of distinct events, but rather of a single, ongoing theme.

His way of communicating, even before his actions, follows a strategy that stands in stark contrast to those adopted by the world’s most prominent leaders in the past.

While traditional politics has often prioritized diplomacy, careful wording, and consensus-building, Trump operates on a completely different level: provocation, immediacy, and breaking conventional norms. His narrative is built on direct, sometimes incendiary statements that bypass institutional and media filters, reaching the public and voters without intermediaries.

Every message is not just a communication but a positioning weapon, capable of generating strong reactions and shifting the political agenda in his favor.

“You should have never started it. You could have made a deal”
(18.02.25 D. prende posizione alla sua maniera sul conflitto tra Russia ed Ucraina, attribuendo l’inizio del medesimo all’agire di Kiev)

Trump’s impact has not been limited to politics and diplomacy but has strongly affected macroeconomics as well. His initial moves (such as warnings and operational decisions) on trade have already had significant repercussions on global markets, influencing growth expectations, monetary policies, and capital flows.

A telling example of this is the statement by Federal Reserve Chairman Jerome Powell, who indicated that, for the time being, the Fed intends to remain on the sidelines.

Before making any adjustments to interest rates, the Federal Reserve believes it must closely monitor the effects of the new administration’s initial actions, signaling both uncertainty and the potential reshaping of the macroeconomic landscape under Trump.

This “wait and see” approach risks heightening concerns among investors and economic operators, who are already dealing with mixed macroeconomic signals: on one hand, signs of slowing growth are emerging, while on the other,
persistent inflationary pressures suggest a possible resurgence in price increases.

All of this is compounded by the overall nervous climate created by the “Trump effect.”

In Europe, the key macroeconomic topics that have dominated the discussion (in chronological order) have been the risk of U.S. tariffS, the potential impact of the end of the Russia-Ukraine conflict, and the outcome of the German elections. However, at least for now, investors appear remain generally confident.

Prospects

So far, the actions of U.S. President Donald Trump, while forceful, have only impacted certain sectors of financial markets (what has happened to Bitcoin in recent days is undoubtedly significant).

However, it cannot be ruled out that such a direct and unpredictable communication style could weigh more heavily on investor sentiment over time. In other words, Washington has put a lot on the table, and the intensity with which the situation is being fueled is pushing it to a boiling point.

It is hard to imagine that this won’t lead to an increase in risks. In March, significant attention will also be focused on the meetings of the world’s major central banks: the ECB on the 6th, the Fed on the 19th, followed by the SNB and BoJ on the 20th.

These meetings will be crucial, as these institutions will need to take a stance on macroeconomic and political dynamics that, in 2025, are evolving differently—not only compared to the previous year (in terms of economic conditions) but also relative to past decades (in terms of policy).