UBS Global Wealth Management has a message for anyone betting on imminent Federal Reserve rate cuts: slow down.
The firm argues that markets are overpricing Fed hawkishness and expects easing to resume, but not on the timeline most traders seem to be banking on. UBS now forecasts a 25 basis point rate cut in December 2026, followed by another 25bp cut in March 2027. That’s later than what Fed funds futures currently imply, and it’s later than what UBS itself was saying just a few months ago.
A forecast that keeps sliding right
Here’s the thing about UBS’s rate cut predictions: they keep getting pushed back. Earlier in January 2026, the bank expected cuts to arrive by mid-to-late 2026. Before that, September 2026 was on the table. Now the first cut has been bumped to December 2026, with a second following in the first quarter of 2027.
UBS isn’t arguing the Fed will never cut. The bank’s core thesis is that markets have overcorrected in pricing hawkishness, meaning traders are simultaneously expecting the Fed to stay tough and expecting rate cuts sooner than conditions justify.
