UBS expect the Federal Reserve to cut rates later this year – here’s why

Via a Friday note from UBS, analysts at the bank say:

“We continue to believe recent economic data underpin our view that a return of disinflation should allow the Fed to start easing policy later this year”

UBS say data in recent weeks has been a little softer.

On inflation specifically, UBS point to price pressures easing in recent months in categories such as shelter. This should bring the CPI down in the months ahead.

Fed officials have been saying that one month’s improvement in inflation will not be enough. If we assume 3 months would be needed, ie. a quarter (and yeah, this is just an assumption) then the earliest we could see a rate cut would be the spet meeting. That’d be a close run thing.

This article was written by Eamonn Sheridan at Source