Podcast Summary: The Walker Webcast with Kate Moore

Date: August 7, 2025
Host: Willy Walker
Guest: Kate Moore, Chief Investment Officer, Citi Wealth Management

Episode Overview

In this episode, Willy Walker welcomes Kate Moore, Chief Investment Officer at Citi Wealth, for a deep-dive into the state of the macroeconomy, the markets, and policy in 2025. Moore offers her candid, nuanced outlook on U.S. growth, inflation, the impact of recent tax and trade policy, labor dynamics, and what these mean for asset allocation. Throughout, she brings her trademark blend of data-driven analysis and plainspoken advice, tackling both the opportunities and fragilities facing investors today. The discussion is timely, following a period of market volatility and landmark political developments.

Key Discussion Points & Insights

1. Current Market Volatility and Immediate Triggers

[02:00–04:15]

• Moore opens by referencing a wild market swing: news that Trump might imminently fire Fed Chair Jerome Powell sent yields surging and equities falling, only for Trump to walk back the claim minutes later.
  • "My stomach did like six or seven flip flops in the time between Mark was finishing up and when I got out here." — Kate Moore [02:00]
• She notes that "expectations for the economy and for rates" are changing "right as I speak," underscoring a theme of rapid, unpredictable volatility.

2. Macro Economic Overview

[04:20–10:50]

• Moore’s outlook:
  • U.S. economy is "solid," with "some percolating areas of inflation" but "fragile" equity markets and "bond market priced to perfection."
  • She stresses that, as CIO, she’s "paid to be uncomfortable about markets" and to "find areas where there could be risk."
    • "My job is to find areas where there could be risk and trying to mitigate those risks for our clients." — Moore [03:40]
• Market snapshot:
  • Equities have rebounded but market internals are confusing—"nothing’s cheap, uncertainty’s high."
  • Investors (including many Citi clients) are sitting on "enormous cash piles," reflecting paralysis from conflicting signals.

3. Tax Bill: Stimulus, Regressiveness, and Political Volatility

[10:51–17:45]

• The freshly passed tax and spending bill is characterized as "regressive"—benefitting high earners disproportionately (e.g., "top 1% by income...will receive 21% of the benefits").
• This exacerbates already weakening consumption at the lower end and could, Moore warns, lead to deeper political polarization:
  • "If we hollow out the middle...we end up with a lot more volatility in politics." — Moore [13:55]
• The structural U.S. government debt problem persists—no real appetite for deficit reduction on either side of the aisle.

4. Debt, Tariffs, and International Appetite for US Assets

[17:46–27:17]

• The CBO scores the tax/spending bill as adding $3–4 trillion to U.S. debt over 10 years; tariff revenues offset some of this, but most current tariffs are on shaky legal ground (facing Supreme Court challenge).
• International investors are "starting to ask...is U.S. growth sustainable? Do I want to put marginal money into US Debt?"
• Moore sees rising uncertainty over corporate confidence and capex, as well as a gradual but real shift by institutional investors out of US debt and into gold, other currencies, or home assets.

5. Inflation: Mixed Signals and Consumer Behavior

[27:18–35:30]

• Inflation in mid-2025: Surveyed expectations and market forecasts anticipate it rising over the next year, though some official measures have recently slowed.
• Notably, 50% of CPI basket components are now running at a 5% annualized rate—masking sectoral differences and tariff impacts.
  • "The uncertainty around the inflation outlook is super high." — Moore [31:46]
• Large retailers are "spreading price increases" across all products to avoid sticker shock, disadvantaging smaller retailers.
• Consumer spending is fracturing: low-end consumers have slowed spending for over a year, with wage growth (4%) somewhat offsetting inflation impacts.

6. Labor Market and Immigration

[35:31–40:00]

• Labor market is "in solid shape"—with 800,000 net new jobs in 2025, and wage growth strong.
• However, Moore is concerned about declining immigration, citing Dallas Fed research forecasting an 80bps drag on GDP as immigration slows/stops.
  • "Most of the new entrants into the labor force who are immigrants have a very high propensity to spend." — Moore [37:30]
• She shares an anecdote about a manufacturer unable to fill factory positions despite high wages, highlighting a mismatch in the labor force that immigration often fills.

7. Corporate Confidence and Capex

[40:01–44:45]

• Despite market highs, there's a notable disjunction between public statements from CEOs (optimistic) and private sentiments or anonymous surveys (wary). Many are "hitting pause" on hiring and capex.
  • "Privately...they say we’ve hit the pause button. It's not negative, but...it takes quarters, not days to restart once the pause button is hit." — Moore [41:12]
• She advises investors to focus on CFO commentary rather than CEO spin during earnings season.

8. Portfolio Positioning: Equities, Fixed Income, and Hedging

[44:46–54:05]

• Equities: Moore is keeping large allocations to tech and high cash-flow companies but is cautious due to market concentration and the risk to corporate margins from unwinding globalization, higher taxes, and rising rates.
  • "Three largest contributors to corporate profitability have been: Number one, globalization, Number two, globalization, Number three, low interest rates." — Moore [49:33]
• Fixed income: Both equities and credit are "priced to perfection," with little value in sovereign long-term debt due to inflation and policy uncertainty. She expects 10-year yields could "drift up" toward or above 5%.
• Gold: For the first time, Moore has added gold as a portfolio hedge, citing diminished faith in the U.S. dollar and shifting global reserves.

Notable Quotes & Memorable Moments

• On Living Through Volatility:
  "My stomach did like six or seven flip flops..." — Moore [02:00]

• On The Duty of a Chief Investment Officer:
  "I am paid to be uncomfortable about markets." — Moore [03:40]

• On the Tax Bill:
  "If we hollow out the middle...we end up with a lot more volatility in politics." — Moore [13:55]

• On Labor and Immigration:
  "Most of the new entrants...who are immigrants have a very high propensity to spend." — Moore [37:30]

• On Public vs. Private Corporate Sentiment:
  "Privately...they say we’ve hit the pause button...it takes quarters, not days to restart once the pause button is hit." — Moore [41:12]

• On Portfolio Construction in 2025:
  "I’ve decided actually that in the absence of certainty, gold looks like a better hedge for me than cash..." — Moore [53:26]

Audience Q&A: Highlights & Timestamped Answers

On Immigration and GDP

[43:35–44:25]

• Baseline assumption: "no net immigration over the course of 2025 and into 2026," leading to "significant dislocations," especially for small businesses. Following Dallas Fed, Moore expects a drag on GDP, with little likelihood of policy change soon.

On the Long-term U.S. Deficit; Ray Dalio's 'Fiscal Cliff'

[45:34–49:45]

• Moore agrees the U.S. faces a real problem "less than 10 years out" on the ability to fund key social programs, and global investors' "willingness...to continue to hold dollars continues to deteriorate." The shift into alternatives like gold/bonds from other countries is real.

On Supreme Court Rulings & Red/Blue State Economic Divergence

[50:19–53:25]

• No immediate sign that businesses are dramatically reallocating based on state politics; labor availability is a more decisive factor than local tax or litigation policy.

On Forecasting Inflation & Rates for Real Estate Decisions

[53:25–55:22]

• Forecast bands are "insanely volatile." Median forecast is best, but "I don't think rates are coming down a lot, unfortunately."

On US Real Estate, Currency Hedging, and the Texas Stock Exchange

[55:23–58:53]

• Expect "increased cost of hedging currency" as global investors diversify. The idea of relocating Citi or launching a Texas stock exchange isn't realistic due to the increasingly virtual nature of financial markets; New York's mayoral policies are a challenge, but not a reason to move HQ.

On the Next Fed Chair and Policy Uncertainty

[58:53–1:01:30]

• Even with political pressure, the Fed's structure makes a radical shift in policy or independence unlikely in the near term. The market impact of speculation on Fed leadership is real and can be seen in immediate movements in yields and the dollar.
  • "The institution itself will prevent any massive swing in terms of how decisions are made.... Policy decisions are a vote of 12 people, not the Fed chair's decision." — Moore [1:00:10]

Structural Summary & Flow

• Macro setting: Wild, real-time volatility driven by geopolitical headlines (Powell, tariffs, inflation).
• Market status: “Resilient but fragile.” Valuations are high, nothing’s cheap, confidence is shaky.
• Policy changes: New tax law is regressive, further hollowing out the middle and lower classes; adds to debt without offsetting discipline.
• Global considerations: International investors revisiting appetite for US debt; gradual shift to diversification in reserves and portfolios.
• Labor & the consumer: Market solid but increasingly fractured; loss of immigration set to damage long-term growth; high- and low-end consumers diverging sharply.
• Corporate behaviors: CEOs maintain public optimism but are privately pausing capex and hiring—Moore urges focus on CFO perspectives.
• Outlook for investors: Focus on high-quality, cash-flow-rich companies (mainly tech); gold as hedge against currency decline and volatility; skepticism toward long bonds.
• Political and legal uncertainty: Supreme Court rulings, red/blue divergence, Fed independence all contribute to a uniquely uncertain investing environment.

Conclusion: Moore’s Key Takeaways

• Stay disciplined: Anchor in high-quality equities, consider gold and creative hedges, expect more volatile conditions.
• Watch labor and consumption: Closures in immigration and fractures in consumer spending could presage trouble not yet visible in headline jobs or GDP numbers.
• Expect higher rates: Inflation likely to stay sticky, long-end yields could reach or exceed 5%.
• Trust long-standing institutions—but stay alert: Even with institutional protections, global faith in the dollar and U.S. debt is being tested as never before.

This summary captures the episode’s central arguments, timely takeaways, and Moore’s grounded yet flexible approach to navigating the “age of volatility.” It’s essential listening for anyone tasked with deploying capital in 2025’s uncertain environment.