UBS delays Fed rate cut expectations to 2027, expects this week's meeting to send a hawkish signal

Odaily Planet Daily News UBS Global Wealth Management has pushed back its expectations for a Fed rate cut to March and June 2027, and no longer expects any rate cuts this year. The firm stated that this move reflects its judgment that this week's meeting will send a hawkish signal. UBS now expects the Fed to cut rates by 25 basis points in March and June next year, compared with its previous forecast of a 25bp cut 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 new Chairman Kevin Warsh. The market generally expects rates to remain unchanged. In a report dated June 15, UBS Global Wealth Management analysts said: "Although Warsh 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 agreement has been reached. Instead, as events unfold and data released in the coming months gradually reveal whether the energy shock is triggering a second round of inflationary shocks, central banks are likely to remain cautious. (Jin Shi)