_150x108_S_1416304017.jpg)
Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
⏰ React to the Market Faster with Custom, Real-Time News Get Started
UBS Projects Fed Will be Forced to Cut Rates Three Times in 2023
© Reuters. UBS Projects Fed Will Be Forced to Cut Rates Three Times in 2023
By Senad Karaahmetovic
UBS economist Jonathan Pingle reflected on Fed’s future actions after the central bank hiked the benchmark interest rate by 75 basis points yesterday.
The economist expects the Fed to deliver another 75 bp rate hike in July before going for 50 basis points in September. The central bank is likely to deliver an additional 175 bp of rate hikes this year, the economist told clients in a note.
As for 2023, Pingle expects the Fed to pause and then start delivering rate cuts to tackle slowing growth.
“We foresee the FOMC taking back some of the rate increases in late 2023, reducing the funds rate to be closer to the longer-run median in late 2023. Three 25 bp rate cuts, starting at the September 2023 meeting, would leave the target range for the federal funds rate at 2.50% to 2.75% at the end of 2023. Following the last 75 bp rate hike, in 1994, the FOMC was cutting rates less than a year later,” Pingle wrote.
UBS projects the Fed will announce the slowdown of balance sheet runoff in Q4 2023 with the start expected in Q1 2024.
All in all, Pingle sees a rising risk of a hard landing.
“As the FOMC pushes nominal rates higher, the headwinds mount, fiscal support falling away, higher prices eroding real income, and higher interest rates. Engineering an increase in the unemployment rate, as the one shown in the SEP projections, is much easier said than done,” he concluded.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.