Eric Harrison, Co-Founder and Managing Partner of IEQ Capital shares perspective on how recent jobs data and Fed policy shifts are influencing today’s market outlook. We see the August jobs report as a meaningful turning point, with payrolls rising by only 22,000 against expectations of 75,000 and June’s numbers revised into negative territory for the first monthly decline since 2020. The unemployment rate also climbed to 4.3 percent, highlighting the loss of momentum in the labor market.1
For investors, the implications are clear, as weak employment data has reinforced the case for Federal Reserve easing with markets fully pricing a 25-basis-point cut at the Fed’s next meeting and futures suggesting additional reductions by year-end and into 2026.²
Harrison explains, “Rate cuts are no longer a question of if, but how much and how soon. The key is understanding whether easing signals healthy disinflation or reflects deeper recessionary pressures.”
Global Bond Yields and Gold Market Trends
The bond market has already responded, with yields on shorter-term Treasuries falling toward two-year lows while 30-year yields remain near five percent. This long-end pressure is not unique to the United States, as long-term yields in both the United Kingdom and Japan have reached multi-decade highs, underscoring global concerns about fiscal stability and central bank independence. ⁴
Gold, on the other hand, has broken out to all-time highs. Investors are clearly seeking a hedge against policy uncertainty and currency volatility.5 Our Chief Market Strategist Mike McIntosh notes, “Gold’s strength shows that investors are positioning for both inflation risks and fiscal pressures. It remains an important barometer of market risks ahead.”
Equities Balancing Optimism and Caution
Equity markets are reflecting this push and pull, with the S&P 500 essentially flat since July as investors balance optimism about rate cuts against caution over slower growth. Corporate earnings have provided resilience, yet volatility remains elevated as sentiment continues to swing back and forth. ⁶
As McIntosh explains, “Historically, equities respond well when the Fed cuts rates without a recession. However, when cuts come as a response to recession risk, the picture is far more challenging. Investors should be mindful of both scenarios.”
IEQ Capital’s Strategic Guidance for UHNW Families
We encourage clients to look through short-term volatility and focus on forward-looking signals. While labor market data is soft, recent surveys show improvement in manufacturing orders, suggesting some stabilization ahead. Corporate earnings have also remained strong, a reminder of the underlying health of the private sector.7
Harrison emphasizes, “Periods of uncertainty often create opportunity for disciplined investors. At IEQ Capital, we guide families and institutions to remain patient, diversified, and focused on long-term objectives.”
Inflation as the Next Catalyst
The next decisive data point will be inflation. Producer prices recently surprised to the upside, and if upcoming inflation data remains elevated, the Fed’s ability to cut rates aggressively will be limited.8
In this environment, we believe UHNW families and institutions should:
- Stay diversified across equities, fixed income, private markets, and real assets.
- Maintain liquidity flexibility to take advantage of volatility when it arises.
- Emphasize active management to identify sector-specific opportunities and avoid areas facing structural pressure.
“Investors should be prepared for both outcomes,” McIntosh adds. “A Fed that cuts rates proactively can support growth and risk assets. A Fed that cuts reactively, out of necessity, could create more difficulty. Building resilience into portfolios now is essential.”
Closing Thoughts
The August jobs data confirmed that the labor market is softening, and it has accelerated expectations for Fed easing. Bonds and gold reflect a defensive stance, while equities remain in limbo as investors weigh optimism against caution.9
For us at IEQ Capital, the takeaway is straightforward. The environment ahead will test investor resolve, but it also presents opportunity for those who remain disciplined and forward-looking. By focusing on diversification, liquidity, and careful allocation, UHNW families can position themselves not only to weather volatility but to benefit from it.
As Harrison reminds us, “This is a moment to lean into opportunity, not retreat from it.”