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UBS Forecasts Two US Fed Rate Hikes in 2026 After Strong Jobs Report
UBS said the stronger-than-expected jobs report changed its call and now sees 25-basis-point hikes in September and December.
- UBS expects the Federal Reserve to raise interest rates by 25 basis points each in September and December, shifting from previous no-change expectations after Friday's jobs report showed 162,000 new positions.
- Hawkish remarks from Fed Chair Kevin Warsh at Jackson Hole in August, combined with steady 4.1% unemployment, prompted UBS to revise its outlook on monetary policy direction.
- Financial markets are pricing in roughly 58% odds of a rate hike at the Federal Open Market Committee's September 15-16 meeting, up from 52% on Thursday, CME's FedWatch tool showed.
- Strategists led by Mark Haefele, global wealth management chief investment officer at UBS Switzerland, recommend buying equity dips and reducing dollar holdings while abandoning short- to medium-duration bond strategies.
- A Fed tightening cycle driven by economic strength rather than inflation control presents different portfolio outcomes, UBS noted, as analysts remain positioned for AI-related investments and structural growth opportunities.
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UBS forecasts two US Fed rate hikes in 2026 after strong jobs report
·London, United Kingdom
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UBS revised its Fed forecast following strong US employment data. Previously expecting interest rates to remain flat throughout 2026, the bank now forecasts two 25 basis point rate hikes in September and December.
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Cryptocurrency News | Cryptocurrency Prices | Market CapUS payrolls beat forecasts, easing recession fears but complicating Fed strategy
The unexpected job growth complicates the Fed's monetary policy, potentially leading to market volatility and influencing future rate decisions.
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Total News Sources11
Leaning Left1Leaning Right1Center2Last UpdatedBias Distribution50% Center
Bias Distribution
- 50% of the sources are Center
50% Center
L 25%
C 50%
R 25%
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