Daily Commentary

MarketMinder’s View: Let us take a stroll down memory lane: In October 2025, the US and South Korea agreed to a “memorandum of understanding,” in which America would reduce most tariffs from 25% to 15% on Korean imports while Seoul pledged $350 billion in US investments, along with another $100 billion for American energy purchases. Since that pact was signed, no projects have emerged—frustrating US officials, with President Donald Trump threatening to hike tariffs again. Well, the latest ongoing talks indicate a pair of deals are close to the finish line, drawing some optimism. However, a look at the process highlights just how slow-moving and limited potential investment’s economic and market impact may be. “The South Korean government this year created a state-run corporation charged with evaluating potential U.S. investments for their commercial viability. A bilateral investment committee then reviews the projects, which would be financed by South Korean state funds, and makes recommendations to Trump. The investments are expected to unfold over a number of years. South Korea’s outlays, in any given year, are capped at $20 billion per the two countries’ agreement.” That $20 billion is astronomical for us normal folks, but when it comes to international trade, it is tiny (South Korean exports have reached nearly $710 billion year to date through August, according to the Korea Customs Service). Besides, most of these projects (nuclear power plants are one under consideration) will take eeeeeoooonnnnssss to complete. The idea this is a huge, near-term surge that should rate in your investment strategy is beyond a stretch.

MarketMinder’s View: With the Fed planning to release its next policy decision and rate announcement next week, speculation about what Fed head Kevin Warsh and co. will/won’t do is in overdrive. This article is a very political analysis of that, so we remind you that MarketMinder favors no party nor any politician and assesses developments solely for their potential market effects. According to this analysis, the Federal Open Market Committee (FOMC) has three choices: they hike without Warsh’s support; the Fed maintains the status quo and doesn’t hike (possibility with some dissents); or Warsh supports a hike. (Technically, the Fed could cut rates too—perhaps unlikely based on market expectations, but it is still a choice.) This piece advocates for a rate hike despite the likely disapproval of the White House, arguing raising rates is necessary to cool inflation and establish the Fed’s independence. We disagree. Not only have inflation trends been more stable than appreciated, rate hikes risk flattening or inverting global yield curves, which would weigh on lending and stunt growth as Fisher Investments founder and Executive Chairman Ken Fisher argued in July. The uptick in inflation is about energy, and nothing about a hike increases oil supply or opens the Strait of Hormuz. That is the basic logic, not anything political. Furthermore, hiking expressly to defend “independence” would be a political move. Now, one or two small hikes alone wouldn’t derail the US economy or markets, and hiking isn’t necessarily political. But it is, in our view, a mistaken policy step and a risk we are monitoring Look, one must realize today that with Warsh confirmed in office, Trump has no legal authority to remove him on policy grounds—and his term will outlast Trump’s time in office. Fed independence fears are faulty, even if the president elects to lambaste Warsh on Truth Social or whatever, and polls of Fed popularity are pretty worthless for a little-understood and unelected post. For more on why, see our August commentary, “Rechewing Fed Independence Fears.”

MarketMinder’s View: This discussion of possible “tourist taxes” in various UK locales (and perhaps nationally) highlights a broader theme worth internalizing for investors: While we think the old adage, “if you tax something, you get less of it” is generally true, taxes’ downstream consequences aren’t always clear-cut. That seems to hold here. Across the UK, cities are mulling a levy on overnight stays as a way to raise funds. The UK hospitality industry has overall pushed back hard, warning it would reduce tourism and result in thousands of job losses. Yet as this analysis points out, cities in Europe, including Amsterdam, Barcelona and Venice, have imposed similar duties. “But there is little evidence they kept visitors at bay: trips to all three destinations have risen consistently over the past decade (despite Amsterdam charging an additional 12.5% for an overnight stay, believed to be the most expensive tourist tax in Europe). In April 2023, Manchester became the first place in the UK to introduce an overnight visitor levy, charging £1 per room per night in the city centre. A study published in the journal Tourism Management in 2025 found that the tax had had ‘no significant impact’ on the occupancy of hotels in the city.” Why is that? Reality is complex, but think this through: If you really wanted to visit Amsterdam, Barcelona or Edinburgh, would you kibosh your plans over a few extra pounds spent on your hotel? If the rate is high enough, perhaps you would. But a low rate likely does more to spur hard-to-identify substitution. Perhaps the money that went to that levy doesn’t go to an extra pastry or souvenir. Or the business can swallow it by adjusting rates. Or the consumer could forego a trip to one British town in favor of another that charges less or has cheaper accommodations. The data on this won’t ever be totally clear. But investors benefit from putting dire-sounding warnings about taxes roiling local industries into perspective and considering that the range of options is much wider than (in this case) tourism boom or tourism doom, especially when there are elections coming up (as is the case here in America). That same diversity in outcomes applies for many other taxes, too.