UBS analysts expect the Federal Reserve to cut interest rates by 50 basis points this year

According to Jintou Data, April 17, UBS’s latest research report highlights that the Federal Reserve is still on the path of further implementing easing policies. This judgment is not made out of thin air, but is based on various recent developments and remarks from the Federal Reserve.

UBS analysis believes that if inflation data can be stabilized and kept under control as expected, policymakers will generally “ignore” supply shocks such as a surge in oil prices, thereby changing the established policy direction.

At the same time, recent public remarks by Federal Reserve Chair Powell also validate this logic. Powell’s comments not only downplay the necessity of tightening monetary policy due to rising energy prices, but also further reinforce market consensus.

UBS also acknowledges that before the Federal Reserve implements another round of easing, it is still looking for further evidence that core inflation continues to fall. Even so, the institution still maintains its view that the Fed will cut rates by 50 basis points later this year.

In addition, UBS believes that U.S. Treasury yields have ample room to move lower. Treasury yields are currently far above pre-conflict levels. The bank’s year-end target expectations for the 2-year and 10-year Treasury yields are 3.25% and 3.75%, respectively.

#瑞银 # Federal Reserve