Here’s why UBS now expects two Fed rate cuts later this year

UBS economists revised their forecast on June 12, 2024, to now predict two Federal Reserve interest rate cuts later this year, citing improving inflation trends and potential economic softening. The Swiss banking giant's shift in monetary policy outlook reflects growing confidence that the central bank will begin easing its aggressive stance on borrowing costs. Previously, UBS had anticipated only one rate cut for 2024, aligning with more conservative market expectations just months ago. The revision comes as recent economic data shows inflation moderating more quickly than anticipated, with consumer prices rising at a slower pace while the labor market remains resilient yet cooling. This updated forecast positions UBS among the growing number of financial institutions that believe the Fed has achieved sufficient progress in its fight against inflation to justify policy adjustments before year-end.