A Fragile Calm: Geopolitics, Central Banks, and the Search for Common Ground

Good Morning Ladies and Gentlemen

“They make a wasteland and call it peace.”

Tacitus

With United States President Donald Trump, who recently marked his 80th birthday, having publicly proposed a potential agreement with Iran on 39 separate occasions, it is clear that not only financial markets but also a wide range of stakeholders across the Middle East and beyond are eager for a meaningful diplomatic resolution and relieved by the 14-point agreement reached between the U.S. and Iran.

The Swiss National Bank vs Other Central Banks

The Swiss National Bank (SNB) has decided to maintain its current monetary policy, leaving its key interest rate at 0%. This decision makes the Swiss franc less appealing as an investment currency compared with others. The short-term inflation outlook for Switzerland is 0.6%; it could decline over the coming months, depending on energy prices. Last week, the European Central Bank raised its key interest rate by 25 basis points, increasing the deposit rate from 2.0% to 2.25%. Meanwhile, on Wednesday evening, the U.S. Federal Reserve opted to keep interest rates unchanged for the fourth time this year, maintaining the target range at 3.5% to 3.75%. However, an interest rate hike in the U.S. has become more probable due to rising inflation. Central banks now have time to monitor inflation developments in the coming months, especially with the reopening of the Strait of Hormuz.

Federal Reserve Chairmen

Ladies and Gentlemen, history provides us with numerous examples of new chairs of the Federal Reserve confronting unexpected economic conditions. Alan Greenspan was taken by surprise during ‘Black Monday.’ Ben Bernanke inherited a housing bubble, while Jay Powell stepped into a prolonged period of quantitative easing, only to realise its reversal was far from simple. Kevin Warsh’s tenure is poised to be characterised by renewed inflationary concerns, influenced by factors such as war, energy prices, and a resilient economy. Prior to President Donald Trump’s controversial tariff policy last year, the post-pandemic surge in prices had largely subsided; however, the shock from tariffs, followed by the conflict in Iran, dramatically altered that landscape. This was, if you ask me, a bit unnecessary.

What We Can Learn From the World Cup

When I view the images in newspapers depicting the World Cup, with scenes of public viewing events filled with enthusiastic fans donning jerseys from various footballing nations and radiating joy, I am similarly filled with a profound sense of happiness. In a world that often emphasises our differences, it is easy to overlook that which fundamentally connects us. While variations in culture, language, background, and opinion can seem pronounced, sometimes even fostering division, underneath these visible distinctions lies a shared human experience. Our common hopes, fears, ambitions, and emotions link us more deeply than we might recognise. Honouring our similarities does not mean dismissing diversity; rather, it acknowledges the foundation that fosters understanding. I believe we all seek belonging, purpose, and meaning. We all strive for happiness and dignity. These shared aspirations forge a subtle yet powerful bond that transcends boundaries. By focusing on our commonalities, we nurture empathy. This perspective encourages us to see ourselves in others, to listen more attentively, and to approach differences with curiosity rather than judgment. When we recognise what we share, we build bridges instead of walls, fostering an atmosphere of dialogue, trust, and cooperation. Ultimately, true unity emerges not from erasing differences, but from grounding ourselves in our collective experiences. By choosing to celebrate these similarities, we strengthen the connections that unite us and cultivate a sense of collective humanity that is both enduring and inclusive. We should have more World Cups and fewer wars.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

I wish you an excellent start to the day and weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
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Mail: smk@incrementum.li