Central Banks
UBS Strategists See Far Deeper Fed Rate Cuts Than What Markets Are Pricing
- Strategists predict 275 basis points of easing, starting March
- Anticipate US sliding into recession by second quarter
The strategists expect the benchmark federal funds rate to fall to between 2.5% and 2.75% by the end of 2024.
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The Federal Reserve will cut interest rates by 275 basis points next year, nearly four times more than what markets are pricing, strategists at UBS Investment Bank predict.
A continued decline in inflation will enable the central bank to start easing policy as soon as March, with rates likely to be cut in the large increments typical of an easing cycle, Arend Kapteyn and Bhanu Baweja forecast.