UBS Reverses Fed Call, Now Sees Two 2026 Rate Hikes — SkimNews
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- UBS Global Wealth Management reversed its Fed forecast on Friday, now expecting 25-basis-point rate hikes in both September and December 2026, having previously anticipated no policy change this year.
- The shift was triggered by August U.S. payrolls of 162,000 — comfortably above expectations — with unemployment holding at 4.1%, combined with hawkish Jackson Hole remarks from Fed Chair Kevin Warsh and rising supply-bottleneck inflation risks.
- Citigroup and Macquarie also raised their rate forecasts after the jobs data, signaling a broader Wall Street recalibration toward tightening.
- Fed Governor Christopher Waller offered a counterweight, saying he would back holding rates steady if upcoming data showed inflation pressures continuing to ease, exposing internal FOMC disagreement ahead of the September 15-16 meeting.
- CME FedWatch data shows markets now pricing a roughly 58% probability of a September hike, up from 52% on Thursday.
Why it matters: With the Fed's September 15-16 decision days away, UBS's reversal pulls the Street consensus toward a hike rather than the cuts Trump has demanded. The entire call flip rested on a single data print — 162,000 August jobs — exposing how thin the trigger is: if September inflation cools, UBS's two-hike path dissolves just as fast.
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