UBS: It is currently expected that the Federal Reserve will cut interest rates by 100 basis points this year.
According to a report by Jinshi, UBS currently expects the Federal Reserve to cut interest rates by 100 basis points this year, higher than its previous forecast of 50 basis points. UBS stated in the report that unless the August employment report is strong, UBS believes the Federal Reserve will begin an easing cycle at its September meeting, cutting rates by 50 basis points. "Our basic judgment is still that the US economy will avoid a recession, and the growth rate will remain at a trend level of close to 2%. With interest rates at a 23-year high, the Federal Reserve has enough flexibility to support the economy and the market." UBS emphasized that the overall financial condition of households is good, real income is growing, and the average debt service cost is still lower than the historical average, with total net worth increasing by 37% since the pandemic began.
