Signs that U.S. Tariff-related inflation has peaked could pave the way for new interest rate cuts from the Federal Reserve, according to an analysis by UBS.
“We believe the Fed is set to ease further, and we expect two 25 basis point rate cuts between June and September. This backdrop is favorable for stocks, bonds, and gold, in our view,” said Mark Haefele, Chief Investment Officer at UBS Global Wealth Management.
The bank’s analysts noted that inflation came in lower than expected at 2.4 percent in January, which has strengthened expectations for a rate cut as early as June. This data point is particularly significant as investors closely monitor the Federal Reserve’s monetary policy decisions.
Notably, limited inflation in the housing sector has confirmed the continuation of a disinflationary trend in the key economic category.
Such relief would enable the Fed to lower rates further, they added, emphasizing that Federal Reserve Vice Chair Philip Jefferson has predicted that disinflation will continue through 2026, aided by strong productivity growth.
“the January inflation report supports our view that the Fed should resume its monetary easing from around mid-year,” the analysts wrote.
Reno Santic
Nyhetsbyrån Finwire
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