UBS: 100bps of Fed price cuts, begin in September regardless of value pressures lasting into 2026

UBS expects Fed to chop charges regardless of persistent value pressures

UBS believes that upward stress on costs is more likely to persist by way of the rest of this 12 months and into 2026, however the financial institution nonetheless sees scope for the Federal Reserve to start easing coverage.

In a word to shoppers, UBS’s world head of equities stated that with general inflation more likely to stay contained in opposition to the backdrop of a slowing US economic system, the Fed is anticipated to renew rate of interest cuts at its September assembly. The financial institution’s base case is for a complete of 100 foundation factors in price reductions over the easing cycle.

UBS stated that whereas value pressures will proceed, the mixture of weaker development and moderating core inflation ought to enable the central financial institution to focus extra on supporting the economic system, fairly than holding charges at restrictive ranges for an prolonged interval.

This text was written by Aaron Cutchburt at investinglive.com.