UBS: Fed is expected to cut interest rates by 50 basis points later this year

UBS Research pointed out that the Federal Reserve is still on the track of further easing. Federal Reserve Chairman Powell recently downplayed the need to tighten monetary policy because of rising energy prices, emphasizing that policymakers often "ignore" supply shocks such as soaring oil prices. UBS expects the Federal Reserve to cut interest rates by 50 basis points later this year and believes that there is sufficient room for downside in U.S. Treasury yields, with year-end targets of 3.25% on 2-year Treasury bonds and 3.75% on 10-year Treasury bonds.