UBS, Goldman execs say US rate cut not imminent

Donnerstag, 06. Juni 2019 08:18

Markets have overpriced the United States Federal Reserve's dovish shift and it may not slash interest rates as much as traders' bets indicate, according to Axel Weber (pictured). UBS AG's chairman said in Tokyo on Thursday, as quoted by the media, that a careful analysis of statements from the central bank's Chair Jerome Powell and the president of its subsidiary in Chicago, Charles Evans, shows a cut isn't imminent.

He interpreted the latest remarks as "likelihood" that "they might consider corrective action" in case of a further weakening indicated in data in the second half of the year. Weber added a resolution of trade conflicts would mean a "complete repricing" and "some upside."

Goldman Sachs Group Inc.'s president and chief of operations John Waldron said at the same event, organized by the Institute of International Finance, that the upcoming easing implied by investors is "fairly substantial" but that it also may be "too optimistic" with regard to quantity and timing. He cited options targeting the decline in the benchmark range by a whole percentage point from the current 2.25% to 2.5%. The executive brushed off the notion that the Fed could opt to act precautionary.

Related Links: Goldman Sachs Group Inc.UBS Group AG
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