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 anticipates two interest rate hikes by the Federal Reserve in 2026, following a robust US jobs report. The brokerage previously anticipated no policy change this year. US employers added 162,000 jobs in August, surpassing expectations, while the unemployment rate remained at 4.1% in August. This data, coupled with hawkish remarks from Fed Chair Kevin Warsh at the Jackson Hole symposium and rising inflation risks, prompted UBS to adjust its forecast.
Citigroup and Macquarie also revised their interest rate predictions following the employment data. The jobs report came after Warsh's hawkish speech at the Jackson Hole symposium in August. Fed Governor Christopher Waller suggested supporting a steady rate if inflation pressures continued to ease. Financial markets now estimate a 58% probability of a quarter-percentage-point rate hike at the Fed's September 15-16 meeting, up from 52% on Thursday.
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