UBS Forecasts Two Federal Reserve Rate Hikes by End of 2026
UBS analysts predict the U.S. Federal Reserve will raise interest rates twice in late 2026, citing Fed Chair Kevin Warsh's recent comments and strong employment data as key factors influencing this outlook. In a speech at Jackson Hole, Warsh emphasized that policymakers must be confident inflation is moving toward the central bank’s 2% target before considering rate cuts. UBS analysts Jonathan Pingle and Abigail Watt noted that Warsh has positioned interest rates as his primary policy tool. The firm currently expects two quarter-point hikes—likely in September and December—but described its forecast as conditional on incoming data, such as the August CPI report. The market is pricing a roughly 60% chance of a rate increase this month following strong job creation numbers that suggest continued labor-market resilience. UBS also highlighted uncertainty around the September decision due to Warsh’s balancing act between policy principles and evolving economic conditions.
Tickers: $UBS
Topics: Federal Reserve inflation interest rates UBS analysis