UBS economist Andrew Dubinsky stated that the Fed is waiting for clearer inflation signals before changing its policy. According to Dubinsky, core personal consumption expenditures (PCE) inflation is currently hovering around 3%, which, partly due to the impact of tariffs, is limiting downward movement. This situation is leading the Fed to maintain a cautious stance, with policymakers reportedly continuing their “wait-and-see” approach.
The report also noted that geopolitical tensions stemming from Iran were putting upward pressure on oil prices, and that the strong labor market was making it difficult for the Fed to enter a rapid easing process. UBS added that while it expects overall economic conditions to improve by 2026, uncertainty regarding the timing of interest rate cuts persists.
*This is not investment advice.