Swiss-based financial giant UBS has released a notable assessment of the US Federal Reserve’s rate cut schedule.
The agency said the Fed’s first interest rate cut could be delayed until September due to persistent inflation and rising geopolitical risks. UBS also expects a second rate cut could be on the table later this year, possibly in December.
UBS economist Andrew Dubinsky said the Fed was waiting for clearer inflation signals before changing policy. Dubinsky said core personal consumption expenditure (PCE) inflation is currently hovering around 3%, and downward revisions are limited due in part to the impact of tariffs. In response to this situation, the Federal Reserve is maintaining a cautious stance, and policymakers are reportedly continuing to take a “wait-and-see” stance.
The report also said geopolitical tensions stemming from Iran are putting upward pressure on oil prices, and a strong labor market is making it difficult for the Fed to enter a rapid easing process. UBS said it expected overall economic conditions to improve by 2026, but added that uncertainty remained over the timing of rate cuts.
*This is not investment advice.
