UBS: Still expect the Federal Reserve to cut interest rates by 50 basis points later this year.

Swiss bank 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, pointing out that policymakers often "ignore" supply shocks such as soaring oil prices, especially when inflation expectations are still firmly under control. Although the Federal Reserve is still looking for further evidence of sustained core inflation before implementing loose policies again, we still expect a 50 basis point rate cut later this year. Given that U.S. Treasury yields are far above pre-conflict levels, we believe there is ample room for them to fall, with our year-end targets for 2-year and 10-year Treasury yields are 3.25% and 3.75% respectively.