“We don’t see the conditions for why this time is so different,” Baweja said in an interview at UBS’s London office. “Inflation is normalizing quickly and by the time we get to March, the Fed will be looking at real rates which are very high.”
The Federal Reserve will cut interest rates by 275 basis points next year, nearly four times more than what markets are pricing, strategists at UBS Investment Bank predict.
A continued decline in inflation will enable the central bank to start easing policy as soon as March, with rates likely to be cut in the large increments typical of an easing cycle, Arend Kapteyn and Bhanu Baweja forecast.
