US Federal Reserve May Consider Cutting Interest Rates by September: UBS Analysis

Analysts at UBS expect the US Federal Reserve may have to consider cutting interest rates by September.

The investment bank, in its analysis of the Beige Book, noted that retail sales figures for March, published on Monday, were higher than expected, showing a 0.7% increase from the previous month after a revised increase of 0.9% in February.

However, despite the strength of the latest official figures, the information in the Beige Book leads the Bank to conclude that the rate of growth in consumer spending and the overall economy may not be as fast. as the GDP model now shows.

“We should also mention the decline in the recent National Federation of Independent Business survey of small businesses, which fell to the lowest level in a dozen years,” UBS said.

“In our view, the Fed will not be able to cut interest rates until the signs of inflation show a decline. However, the weak outlook reported by the contacts is likely to make them more willing to consider on further raising interest rates,” analysts said.

Therefore, for the time being, and consistent with recent comments from Federal Reserve Chairman Jerome Powell, UBS expects the Fed to maintain current interest rates at this time.

However, if inflation falls as they expect, analysts note that “the Fed should prepare to cut interest rates by September.”

This article was produced and translated using AI technology and reviewed by an editor. For more information, please see our Terms and Conditions.