UBS Delays Fed Rate Cut Expectations to 2027, Expects Hawkish Signal from This Week's Meeting

Odaily Odaily reports that UBS Global Wealth Management has pushed back its expectations for the Federal Reserve's interest rate cuts to March and June 2027, and no longer anticipates any rate cuts this year. The institution stated that this move reflects its assessment that this week's meeting will send a hawkish signal. UBS now expects the Fed to cut rates by 25 basis points each in March and June next year, whereas its previous forecast was for 25 basis point cuts in December 2026 and March 2027.

The Federal Reserve will announce its interest rate decision this week, which will be the first meeting chaired by the new Chair, Walsh. The market widely expects rates to remain unchanged. UBS Global Wealth Management analysts said in a report dated June 15: "Although Walsh has previously expressed a more dovish stance, we expect the tone of this meeting to be more hawkish, both in the statement and in the dot plot."

UBS stated that major central banks will not hastily shift to a more dovish policy stance just because a US-Iran deal is reached. Instead, as events unfold and data released in the coming months gradually reveal whether the energy shock is triggering second-round inflation effects, central banks are likely to maintain a cautious stance. (Jin Shi)