UBS ON AIR
Loading…
FX BANK FORECAST · COVERAGE
Institutional FX coverage in your inbox
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 36 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 36 institutional desks. No promotion.
From the original
New York Federal Reserve President Williams—a genuine economist, who should thus be listened to —signaled that the Fed is happy with the state of the US economy and that two 25bp rate cuts this year would be appropriate. This clearer guidance for the future is a big improvement o
Per the full note [source], UBS Chief Economist Paul Donovan argues that the FOMC meeting minutes and Fed Governor Waller's speech are the key events today, with the market focused less on the current economy and more on political uncertainty in 2025. Donovan expects inflation to moderate in H1 2025, allowing the Fed room to ease, but sees political risks to inflation as a later concern. The desk's base case is that the Fed will cut rates in the first half of the year, though internal Fed divisions add nuance. This view aligns with a modestly bullish USD stance near term, but the broader path hinges on political developments.
The desk interprets the current state of U.S. monetary policy as poised for stability amid mixed signals regarding inflation and external pressures. Per the full note from UBS's Paul Donovan, while consensus leans toward unchanged interest rates today, President Trump's call for cuts adds a layer of complexity, reflecting his borrower-centric view. Underlying inflation remains modest, but ongoing geopolitical tensions and fiscal hesitations create uncertainties that the Fed must navigate carefully. Looking ahead, traders should remain vigilant for new data that could provoke rate adjustments, particularly regarding fiscal policy impacts and import taxes.
Live cross-firm bank consensus across 36 desks — FX, oil & gold
View bank forecasts