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.”
Sources
- Bloomberg, August 2025 Jobs Report
- FactSet, Fed Funds Futures Data
- Bloomberg, U.S. Treasury Market Yields
- Bloomberg, UK and Japan Long-Term Yield Data
- FactSet, Gold Market Prices
- Bloomberg, S&P 500 Performance
- FactSet, ISM Manufacturing and Services Surveys
- Bloomberg, Producer Price Index Report
- Bloomberg, Multi-Asset Market Commentary
Investments in fixed income, private markets, and real assets involve significant risks, including but not limited to market, credit, interest rate, liquidity, competitive, execution, tax, and valuation risks. Real estate strategies may be adversely affected by rising rates, declining occupancy, or tenant defaults. Lending strategies often involve unrated or below-investment-grade borrowers, limited liquidity, and potential mark-to-market volatility. Distressed and GP stakes investments may be highly illiquid, concentrated, or sensitive to market cycles. Even investment grade bonds carry interest rate, credit, and market risks. These investments may be tax-inefficient, and returns net of taxes may be materially lower than pre-tax results. All investments involve risk, including the potential loss of principal, and are not suitable for all investors.
This material is as of the date indicated, not complete, and subject to change. Additional information is available upon request. No representation is made with respect to the accuracy, completeness, or timeliness of information, and IEQ assumes no obligation to update or revise such information. The information set forth herein has been developed internally and/or obtained or derived from sources believed by IEQ Capital, LLC (“IEQ Capital”) to be reliable. However, IEQ Capital does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does IEQ Capital recommend that the attached information serve as the basis of any investment decision. This document has been provided to you solely for information purposes and does not constitute an offer or solicitation of an offer, or any advice or recommendation, to purchase any securities or other financial instruments, and may not be construed as such. It is not intended to be, nor should it be construed or used as investment, tax, accounting, legal or financial advice. IEQ provides no assurance or guarantee that any investment will be successful or that any returns will be achieved. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.