Odaily reported that UBS Global Wealth Management has revised its expectations for the timing of Federal Reserve rate cuts, pushing its forecast to March and June 2027 and no longer expecting any rate reductions this year. The institution said the move reflects its judgment that this week’s Federal Reserve meeting will deliver a more hawkish signal.
Rate-cut timeline moved further into 2027
Under UBS Global Wealth Management’s latest forecast, the Federal Reserve is now expected to cut rates by 25 basis points in March next year and by another 25 basis points in June. Its previous projection had called for two 25-basis-point cuts, one in December 2026 and another in March 2027. The change therefore moves the expected easing path further back and removes any remaining forecast for a rate cut this year.
The Federal Reserve is scheduled to announce its interest-rate decision this week. The meeting will be the first chaired by new Chair Warsh. The market is broadly expected to see rates remain unchanged at this meeting. UBS’s updated view centers less on an immediate cut decision and more on the policy tone it expects the Fed to convey through the meeting statement and the dot plot.
UBS expects a hawkish tone in the statement and dot plot
In a report dated June 15, analysts at UBS Global Wealth Management wrote: “Although Warsh had 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.” The comment indicates that UBS does not expect Warsh’s earlier dovish remarks to prevent the meeting from presenting a firmer policy message.
UBS also said major central banks will not rush to shift toward a more dovish policy stance simply because a U.S.-Iran agreement has been reached. Instead, as developments unfold and data released over the coming months gradually show whether the energy shock is triggering a second-round inflation shock, central banks are very likely to continue maintaining a cautious stance. The item was sourced from Jinshi.