Lates News

A UBS research report pointed out that the Federal Reserve is still on track for further easing. Federal Reserve Chairman Powell recently downplayed the need to tighten monetary policy due to rising energy prices, stating that policymakers typically "ignore" supply shocks such as surging oil prices, especially when inflation expectations remain firmly under control. Although the Fed is still seeking further evidence of sustained core inflation decline before implementing accommodative policies again, we still expect a 50 basis point rate cut later this year. Given that US Treasury yields are far above pre-conflict levels, we believe there is sufficient downside potential, and we have year-end targets of 3.25% and 3.75% for 2-year and 10-year Treasury yields respectively.