UBS: Still Expects the Fed to Cut Rates by 50 Basis Points Later This Year

BlockBeats News, April 17th. A UBS research report pointed out that the Federal Reserve is still on a path of further easing. Federal Reserve Chairman Powell recently downplayed the need to tighten monetary policy due to the rise in energy prices, stating that policymakers usually "overlook" supply shocks such as surging oil prices, especially when inflation expectations remain well anchored.

While the Federal Reserve is still seeking further evidence of sustained core inflation moderation before re-implementing loose policy, we still expect a 50 basis point rate cut later this year. Given that U.S. Treasury yields are far above pre-conflict levels, we believe there is ample room for them to fall, with our year-end targets for 2-year and 10-year Treasury yields at 3.25% and 3.75%, respectively. (FXStreet)