UBS: Walsh Era Debut Hawkish, but Rate Hike Expectations for the Year May Be Overdone

Golden Finance reported that on July 1, UBS said in its latest report that the first Federal Open Market Committee meeting after Federal Reserve Chair Kevin Warsh took office sent a clear hawkish signal. However, market expectations for further rate hikes this year may be overly aggressive. UBS expects the Federal Reserve to keep the federal funds rate unchanged at 3.50%-3.75% for the rest of this year, and recommends that investors increase their allocation to high-quality short- and medium-duration bonds to lock in the current higher yields.
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