UBS: Warsh’s First FOMC Meeting Hawkish; Market Rate Hike Expectations May Be Overly Aggressive

Odaily reported that UBS stated in its latest report that the first Federal Open Market Committee (FOMC) meeting chaired by Fed Chairman Kevin Warsh delivered a clear hawkish signal, but market expectations for rate hikes this year may be overly aggressive. UBS expects the Fed to keep the federal funds rate steady at 3.50% to 3.75% for the remainder of the year and advises investors to increase allocations to short- to medium-duration high-quality bonds to lock in current elevated yields.