UBS: It is expected that the Federal Reserve will start cutting interest rates in September

UBS economists believe that US economic data will continue to weaken in the coming months, emphasizing that the end of this round of Federal Reserve easing cycle is more important than the beginning. UBS economists reiterated their outlook for a soft landing for the US economy on Monday, predicting that the Fed will start cutting interest rates in September and suggesting that markets may have misjudged the extent of future rate cuts by the Fed. UBS concluded: "Overall, we think markets are underestimating how many times the Fed might cut rates during this cycle."

The Federal Reserve kept policy rates unchanged at its June meeting, with updated dot plot forecasts showing only one rate cut by year-end - a 25 basis point reduction - down from three in March. This has led some people to worry that The Federal Reserve may keep interest rates unchanged until December.