Daily Comment (September 22, 2025)
by Patrick Fearon-Hernandez, CFA, and Thomas Wash
[Posted: 9:30 AM ET] | PDF
Our Comment today opens with some observations regarding the latest surge in global gold prices. We next review several other international and US developments with the potential to affect the financial markets today, including a potential new wealth tax in France, big anti-corruption protests in the Philippines, and the White House’s new $100,000 application fee for H-1B worker visas.
Global Gold Market: Near gold futures prices as of this writing have jumped approximately 1.4% to a new record high above $3,760 per ounce, apparently reflecting investors’ increasing confidence that the Federal Reserve will cut US interest rates aggressively over the coming year. On that note, traders are looking ahead to scheduled comments later today by Stephen Miran, essentially the White House’s new representative on the Fed’s policymaking committee. Miran will likely continue to press the argument for aggressive rate cuts.
- Other developments are probably also helping to convince investors that deeper rate cuts are coming and will continue to boost gold prices. For example, the Fed’s preferred gauge of inflation, the PCE price deflator, will be updated for August at the end of the week. If it shows well-behaved inflation, the Fed will be more likely to keep cutting rates.
- In addition, it appears that global central banks are continuing to buy gold aggressively to diversify their portfolios away from the dollar.
- Geopolitical tensions, central bank buying, and falling real interest rates have historically been associated with strong gold prices. As just one example of our continued positive outlook on gold, we currently maintain meaningful exposure to the yellow metal in all of Confluence’s Asset Allocation strategies and in our Global Hard Assets portfolio.
US Industrial Policy: Reports late Friday said the White House intervened last week to prevent US Steel from shutting down a major facility in Granite City, Illinois, invoking the controversial “golden share” granted to the federal government to allow Japan’s Nippon Steel to buy the firm. The move will likely fuel further concern about rising government intrusion into private-sector business decisions.
- If those concerns worsen too much, high-profile firms at risk of intervention could see their stock values decline.
- More broadly, such activist policy by the government could further undermine global investors’ view of the US investment environment, pushing down the value of the dollar and giving a further boost to foreign stock values.
US Immigration Policy: President Trump on Friday signed an order imposing a $100,000 fee when firms apply for H-1B visas, which are widely used to bring technology workers from China and India to work in the US. Administration officials argued the fee would ensure that firms only bring in exceptionally skilled workers, creating more opportunities for US graduates and raising their pay.
- For US companies in the technology sector and beyond, a key risk is that the pool of competent US workers may not expand quickly enough to replace the foreign workers, leaving them with insufficient tech talent to innovate, grow, and keep boosting the value of their stock.
- So far today, the new policy is also weighing on Indian technology service providers, which provide many of the Indian workers who arrive in the US on H-1B visas. For example, Infosys, Wipro, and Tata Consultancy Services have all seen their stock price fall by at least 2.2% so far today.
France: With political polarization continuing to complicate the effort to cut the government’s gaping budget deficit, the center-left Socialist Party is pressing for an annual 2% wealth tax on anyone with a fortune greater than 100 million EUR ($118 million). Importantly, the Socialists are crucial to the survival of Prime Minister Lecornu’s government. If they can use that position to get the proposal passed, it would undermine President Macron’s effort to make France more business friendly and would likely weigh on French equities.
Israel: After the United Kingdom, Portugal, Canada, and Australia recognized Palestine as a state over the weekend, right-wing members of Prime Minister Netanyahu’s government have responded by demanding that Israel immediately annex the West Bank, which Israel has occupied since the 1967 war. Netanyahu is reportedly mulling a range of options, including partial annexation, and may announce his decision in the coming days. Any move to annex even a part of the territory would likely further isolate Israel, weighing on its economy and markets.
Russia-Estonia: Reports late Friday said three Russian MiG-31 fighter jets flew over Estonian territory for 12 minutes before being chased away by Italian F-35 fighters operating in NATO’s “Baltic Sentry” program. The incident marks the third incursion of Russia aerial assets into NATO territory in the last week. That suggests Russia has taken a page from China’s strategy in the Asia-Pacific region, where it gradually increases its “grey zone” activity in territory it covets in order to normalize its presence and potentially mask future aggression.
Philippines: Continuing a recent trend, tens of thousands of protesters marched in locations around the country yesterday to decry public corruption, prompting the government to put the armed forces on alert. The protests stem from news that officials and their cronies siphoned some $2 billion from fake flood-control projects in a province north of Manila. The protests are now morphing into a broader movement against public corruption, which could potentially topple the Marcos government, spark political instability, and weigh on Philippine asset values.
Argentina: The central bank bought more than $1 billion of pesos Wednesday through Friday to keep the currency’s value from falling below the band set by President Milei in April. In addition, Economy Minister Caputo vowed the government would “sell to the very last dollar” to keep the peso within its band. The currency has plunged some 9% over the last two weeks after Milei’s party unexpectedly lost local elections in a landslide, suggesting his libertarian policies may not have staying power. Argentine stock prices have fallen some 30% since early August.