# Roundup of the week: 19 September 2025 _US-China trade talks made real progress this week, with TikTok’s ownership close to settlement and a broader deal in sight. The Fed cut rates, UK inflation stayed calm, and China’s equities continued their sharp recovery. Europe, meanwhile, remains stuck in bureaucratic gridlock._ Neil Woodford · 19 September 2025 · 6 min read ![Jerome Powell, Chair of the Federal Reserve of the United States, stated this week that it was hard to know what to do next with the US economy as there were no easy routes left.](https://cdn.sanity.io/images/v3acfbvo/production/ba205b556f3ca03aa21261548604f3604a9bde18-1800x1200.jpg?w=1600&fit=max&auto=format) --- If you think I have missed something you would like to discuss or would like to send in a question for next week's podcast episode, [please let me know](mailto:hello@noisecancelling.co), and I will give you my view. ## Politics ### US/China trade deal Aside from a few relatively inconsequential stories this week, I though the one that stood out and which has most relevance to the future of financial markets and geo-politics, was the news that on-going discussions between the US and China that are amongst other things grappling with tariffs, rare earths, chips, TikTok and reciprocal market access appear to have gone well. The ownership of TikTok has been a sticking point in the wider US-China trade talks. The apparent agreement on how to resolve this issue is key to efforts to negotiate a wider trade deal with lower and fewer trade barriers. The details of TikTok’s plan to continue operating in the US are emerging. They include the composition of the company’s board, which will be dominated by US citizens, and the new investor consortium, which will own 80% of US TikTok and includes Oracle, Silver Lake, and Andreessen Horowitz. Oracle will also handle US TikTok user data at its Texas operation. The Chinese founder of TikTok, Bytedance, will retain a 20% ownership. According to those briefed on the discussions, China has conceded ground to get this TikTok agreement in place to remove the barrier to a wider and permanent trade deal, which it is hoped will be sealed in a Xi/Trump summit later in the year. This will be good news for financial markets everywhere and especially for China, where equity markets have been on a roll in recent weeks, possibly in anticipation of this deal. In the meantime, it would also appear that Trump has, in some respects, already got his way, as reflected in the data released this week showing that Chinese goods now account for about 12% of total US imports, down from 22% in 2018. ### Nvidia chips and China In a separate escalation of the “chip wars,” this week saw the announcement from China’s internet regulator that effectively bans its largest tech companies from buying Nvidia’s AI chips (albeit the slightly dumbed-down ones). This is a further step designed to force its domestic chip industry to compete more effectively with the US. Specifically, the Cyberspace Administration of China (CAC) has told companies, including Alibaba and ByteDance, to end their testing and orders for Nvidia’s China-specific RTX Pro 6000D, which is used in automated manufacturing. This ban adds to the earlier guidance from this regulator that Chinese tech companies should no longer order Nvidia’s China-only H20 chips, which are widely used in AI applications. These bans follow the regulator’s claim that China’s domestically produced chips have attained performance criteria equivalent to these Nvidia’s chips and reflects the wider desire to see Chinese chip technology catch and exceed that of the US. ## Economics ### US This week's big story is the Fed’s decision to cut interest rates. The 25bps cut was widely expected, albeit the recently appointed Trump pick for the Fed, Stephen Miran, voted for a 50bps cut. The rationale for the decision was driven by the view that, since the early Spring, there had been a material deterioration in the labour market and that the committee’s earlier concerns about the inflationary impact of President Trump’s tariffs had changed. The governor described the inflationary impact of the tariffs as being smaller and slower to emerge than they had previously expected. The dot plot chart (the dot plot chart shows where each of the 19 Fed officials think interest rates are headed over the next three years and beyond. The dots are anonymous), shown below, gives a guide to where the Fed committee thinks rates are headed over the medium term. The median expectation is for another two cuts this year and further reductions down to about 3% by the end of 2027. ![Roundup of the week: 19 September 2025](https://cdn.sanity.io/images/v3acfbvo/production/67140a2e853c557c93619722ed4d5458c13e1aea-3314x3274.png?w=1600&fit=max&auto=format) ### UK This week’s inflation data from the UK was bang in line with expectations. Once again, instead of predicted panic, UK financial markets were a sea of tranquillity after the release. Sterling remained close to its year’s high against the US dollar, the ten-year gilt yield fell marginally, and the UK equity market went up. Not quite the reaction the doom-laden media would have wanted, but a sensible one, nonetheless. UK inflation, which has been pushed up by the measures announced in the budget last October, is close to peaking and will start to fall in October. By the mid-point of next year, I expect UK CPI to be close to the 2% target and, in turn, UK interest rates to fall to 3.5% or below. Today, the Bank of England announced that the MPC had unsurprisingly decided to hold rates at 4%. This was widely expected. The Bank also announced that there would be a £30bn reduction in the pace of QT, which was also in line with what had been expected. Interestingly, two rate-setting committee members voted for a 25bps reduction at this meeting (of the nine members) which surprised me a little. This bodes well for what I expect, which is a further cut in November this year. ### EU This was an interesting story, albeit unsurprising, but also depressing. The background is that over a year ago, Mario Draghi, the ex-head of the ECB and “saviour” of the EU itself, arguably, highlighted what needed to be done in a much-anticipated report, to improve EU competitiveness and close the productivity gap with the US and China. More than a year on from that report, it appears, according to Mr Draghi himself, that of the 383 individual recommendations, only about 10% have been implemented, whilst the rest are “mired in political disagreement and bureaucratic wrangling”. At a time when the EU economy is close to flatlining and the gap with the US and China widens further, this is very disappointing. I thought Mr Draghi’s parting warning was especially on the money: > "Europe's citizens and companies... express growing frustration. They are disappointed by how slowly the EU moves. They see us failing to match the speed of change elsewhere. They are ready to act, but fear governments have not grasped the moment's gravity." ## Markets ### US Clearly, investor sentiment in the US has improved in recent months, especially following the Fed’s interest rate cut, which was widely anticipated. This long-delayed move by the Fed, combined with significantly less concern over tariffs and their impact on the US economy, is creating a much more positive backdrop for the equity market and for Treasuries too. Having said that, I still would argue that leading tech stocks and the broader market are overvalued, and so I am not tempted, despite this good performance, to change my mind on the US market outlook. Having said that, I was very interested to see Donald Trump calling for US companies to ditch the long-established practice of publishing quarterly results. This practice is, in most cases, an SEC requirement, but for years, I have believed that it not only unnecessarily adds to corporate costs and distracts company executives from doing what they are paid to do, but it also incentivises short-termism, which in turn catalyses unwarranted trading activity. This detracts from longer-term thinking and a patient approach to building wealth. Clearly, it’s great news for brokers who benefit from greater trading activity, and not surprisingly, they tend to be advocates of more frequent company reporting. But by encouraging investors to become busy fools, it does, in my opinion, harm the long-term interests of investors. I suppose my point is that in the vast majority of cases, a business's intrinsic value does not change that much over three months, so why report that frequently? (As an aside, the EU and Singapore have both dropped mandatory quarterly reporting.) ### China Chinese equity markets have been on a tear in recent months, as you can see from the two charts below. The first is the Hang Seng, and the second is the China mainland index, the CSI 300. ![Roundup of the week: 19 September 2025](https://cdn.sanity.io/images/v3acfbvo/production/42438669e175a7f73f9a10d79e0054183d8e7b06-2268x1444.png?w=1600&fit=max&auto=format) ![Roundup of the week: 19 September 2025](https://cdn.sanity.io/images/v3acfbvo/production/a113773d6cc690f7e0d1d4ea9300122091319349-2268x1444.png?w=1600&fit=max&auto=format) Quite what has triggered this bout of domestic Chinese investor enthusiasm is not at all clear, but my guess is that it is the product of increasing confidence in the authorities’ willingness to target stimulus to help the economy, combined with increasing confidence that the worst fears around trade with the US are now unlikely to become a reality. I think there is also increasing confidence in the AI capabilities of some of China’s leading tech companies. Either way, as I predicted at the start of the year, China’s equity markets have bounced back remarkably well, confounding some of the so-called experts who at the end of last year were describing China as uninvestible.