UBS: Still expects the Federal Reserve to cut interest rates by 50 basis points later this year

Mars Finance News. On April 17, a UBS research report stated that the Federal Reserve remains on a course of further easing. Fed Chair Powell has recently played down the need to tighten monetary policy due to rising energy prices, saying that policymakers typically “ignore” supply shocks such as surging oil prices, especially when inflation expectations are still firmly under control. Although the Fed is still looking for additional evidence that core inflation will continue to fall before implementing another round of easing, we still expect a 50 basis point rate cut later this year. Given that U.S. Treasury yields are far above pre-conflict levels, we believe there is sufficient room for them to move lower. Our year-end targets for 2-year and 10-year Treasury yields are 3.25% and 3.75%, respectively. (Jin10)