Rate-cutting cycle to be deeper than expected as global disinflation underway: UBS
Investing.com -- Central banks around the world have kicked off the rate-cutting cycle that will likely end with global rates much lower than expected, UBS says, as too much focused on recent noisy inflation data has overshadowed the global disinflation trend that is underway.
Central banks including the European Central Bank, Bank of Canada, Swiss National Bank, Czech National Bank, have already started the rate-cutting process, with the Fed expected to start cutting September, UBS estimates, as"incoming data on inflation, growth, and the labor market will justify a first cut in September."
"We think markets will start to price a lower level of long-term interest rates going forward," UBS added. Recent inflation has proven sticker than expected, but UBS says that while noisy inflation data may be sufficient to keep central bank policymakers cautious, but the global disinflationary process is well established.
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