3 Things You Need to Know This Week | BRICS Summit, Fed Minutes, Trade Deal Deadline (Jul. 7, 2025)

Transcript

Ben Thistlethwaite

Hello and welcome to 3 Things You Need to Know This Week. This is our regular series designed to help you sift through the noise across financial media and understand what really matters for markets. Now here are the three things you need to know this week. First up, the BRICS summit. Leaders from Brazil, Russia, India, China and South Africa, a group known as the BRICS, just wrapped up their two-day annual summit. Recently, the group has expanded to include countries like Egypt, Ethiopia, Iran and the United Arab Emirates. The BRICS aim to strengthen collaboration between their countries in hopes to counterbalance major countries like the United States and G7 nations.

One idea that's been floated is a shared BRICS currency to rival the dollar. We don't see this as something for investors to lose sleep over. And here's why: Unlike the eurozone, the BRICS countries don't operate as a single unified economic bloc with a shared monetary policy. Instead, their countries have diverse and often conflicting interests. This makes economic coordination a real challenge. Plus, the dollar's strength comes from the size of the United States economy, its open financial system, strong legal framework, and deeply liquid markets. Even if alternative currencies gain ground over time, the dollar’s structural advantages are really unlikely to fade anytime soon.

Next, Fed minutes. The Federal Reserve will release minutes from its June meeting on Wednesday. Investors often scour these meeting minutes searching for clues about future rate decisions. On top of this, President Trump recently mentioned he has a short list of candidates to replace Fed chair Jerome Powell when his term ends next May. This has led to a lot of speculation about an early announcement of a successor, maybe in an effort to undermine Powell, but it's not really causing much market reaction. This isn't the first time President Trump has voiced interest in replacing Powell.

So, the latest remarks really didn't catch anyone off guard. And even if a replacement were announced early, markets likely wouldn't see any significant impact. Choosing a new Fed chair is a lengthy process. It requires Senate approval. And perhaps most importantly, the Fed operates as a voting committee, so no single person determines policy. The Fed chair may try to guide the committee, but decisions rely on the collective views of all the members. For more thoughts on this topic, make sure to check out Ken Fisher's commentary from June 6th titled Trump vs. Powell: What's Next for the Fed Chair? You can find it conveniently linked in the video description.

And finally, the trade negotiation deadline. Back in April, President Trump paused his Liberation Day tariffs for three months, setting July 9th as a date higher tariffs could return. The deadline is just around the corner, and we've only got a couple of trade agreements in place, including one with Britain and a preliminary deal with China. This means uncertainty continues. Now the big question is whether higher tariffs will return or if the pause will be extended. While nothing has been officially announced, some administration officials have already downplayed the July 9th deadline. Treasury Secretary Scott Bisset mentioned Labor Day might be a more realistic timeline, and white House press Secretary Caroline Leavitt called the current deadline "Not critical."

If extended, it's unclear whether that would apply to all trading partners or just those countries the US is currently negotiating with. And this lack of clarity is a challenge. Having more certainty would allow businesses to plan effectively, and while extra time may be helpful, more delays could actually do more harm than good by allowing uncertainty to continue. This uncertainty over trade policy seems to be hitting US stocks the most, which is one of many reasons we expect non-US stocks to keep leading global markets for the rest of the year.

And that's it for this episode of 3 Things You Need to Know This Week. For more of our thoughts on markets, check out This Week in Review. It's released every Friday. You can also visit FisherInvestments.com. Thanks for tuning in and don't forget to like and subscribe!