Alden also reiterated her long-standing bullish view on Latin America, which has already outperformed. While she remains positive on Latin America for the long run, she said her relative optimism has increased more sharply for India in the year ahead, driven primarily by the valuation reset in Indian markets.
On the broader global macro landscape, Alden said markets are likely to look through short-term volatility arising from escalating US-Europe trade tensions, expecting eventual de-escalation. “We saw over the past year, whenever there were very big tariff escalations, there tended to be immediate term reactions, but then the market generally tried to see through it and assumed that there’s going to be some sort of de-escalation,” she said.
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This outlook is complicated by a pending Supreme Court decision on the legality of unilateral tariffs. Alden said betting markets suggest the court is unlikely to rule in the President’s favour, potentially limiting the scope for large, long-term tariffs. However, she cautioned that the administration has indicated it would seek legal workarounds, meaning tariffs are unlikely to disappear entirely. She added that this legal and political complexity may provide some “breathing room” for markets by slowing the pace of escalation.
Alden also highlighted the growing friction between the US Federal Reserve and the executive branch, which she described as the most serious since the 1951 Treasury-Fed Accord. With Fed Chair Jerome Powell expected to appear in court on a related matter, the conflict has taken on a more formal character.
Despite President Trump’s repeated calls for lower interest rates, Alden said her base case remains that Powell will complete his term as chairman. She pointed to the recent de-escalation from the White House and suggested that key figures, including the Treasury Secretary, are not in favour of a major confrontation. “My base case is the first half of this year, we don’t really see fireworks in that regard,” she said, adding that the Fed’s balance sheet is likely to continue its gradual expansion regardless of the political noise, even as questions over central bank independence remain a long-term issue to watch.
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For the entire interview, watch the accompanying video
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