UBS forecasts two US Fed rate hikes in 2026 after strong jobs report
US employers added 162,000 jobs in August, comfortably ahead of expectations, while the unemployment rate held steady at 4.1%.
UBS forecasts two interest rate hikes by the Federal Reserve in 2026 following a robust US jobs report. Earlier, the brokerage had anticipated no changes this year. In August, U.S. employers added 162,000 jobs, surpassing expectations, while the unemployment rate remained steady at 4.1%. This data bolstered views of a robust labor market.
UBS Global Wealth Management highlighted hawkish remarks, including Fed Chair Kevin Warsh's speech at the Jackson Hole symposium, supply bottlenecks driving up inflation risks, and August labor data as reasons to revise its forecast. Citigroup and Macquarie also adjusted their interest rate forecasts. Fed Governor Christopher Waller suggested supporting rates if inflation pressures continued to ease.
Financial markets now see a 58% chance of a quarter-point rate hike at the Fed's September meeting, up from 52% on Thursday, according to CME's FedWatch tool.
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