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The yield on 30-year UK government bonds hit its highest rate in 27 years reaching 5.75% on Wednesday. The wider global bond sell-off has seen the rate rise steadily over the last 12 months. Yields dropped down to 5.57% later in the week following increased odds of a US rate cut. We weren’t alone in seeing borrowing costs rise, with yields on 30-year German, French and Dutch bonds rising to their highest level since 2011.

In the US, the week got off to rocky start after Trump announced he was going to fire Federal Reserve Governor Lisa Cook over allegations of mortgage fraud. Cook said she’ll sue the Trump administration and plans to stay in her role on the Fed’s rate-setting committee. An emergency court hearing on Friday ended without a ruling, kicking off a potential legal battle that could go all the way to the Supreme Court and have serious implications for the US central bank’s independence.

An interview with OpenAI chief Sam Altmann raised question marks about the pace of AI investments and sparked an equity sell-off last week. While comparing the current dynamic to the dot-com bubble, Altmann said, “Are we in a phase where investors are overexcited about AI. My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes.” Before going on to add, “When bubbles happen, smart people get overexcited about a kernel of Truth”. US markets, particularly the NASDAQ, fell in response but did bounce back on Friday following a speech by Fed Chair, Jerome Powell.

The number of people in work in UK fell for a sixth consecutive month in July, down by 8,000. June’s decline was revised from 41,000 to 26,000, as the Office for National Statistics (ONS) warned that payroll numbers should be treated with caution following concerns about the quality of the data.

The much-anticipated 1 August tariff deadline coinciding with corporate earnings season has proved to be an interesting barometer for market health. Barring some specific sectors that have found themselves exposed to tariffs and other factors, those that have reported earnings have generally performed well amidst the year’s turbulence.

Tariffs are an unavoidable factor of global commerce currently and this is unlikely to change for the rest of Donald Trump’s time in office…

Despite the first half of 2025 being marked by significant market falls, the US launching strikes on nuclear facilities in Iran and tariffs at a 100-year high, markets appear to be performing well. With the first half of 2025 behind us, now is a good time to take stock of the current environment and consider how to navigate what’s ahead.