UBS Raises Rate Hike Expectations After Strong US Jobs Report

UBS has revised its forecast for US Federal Reserve interest rate hikes following a stronger-than-expected August jobs report. The brokerage now expects two quarter-point increases in September and December, up from no policy change previously anticipated.

The jobs data showed US employers added 162,000 jobs in August, beating expectations, while the unemployment rate held steady at 4.1%. This has reinforced views of a resilient labor market, leading UBS to revise its interest rate call.

Citigroup and Macquarie have also revised their forecasts following the employment data, with hawkish communication from Fed officials contributing to the change in outlook. Financial markets are pricing in a roughly 58% chance of a quarter-percentage-point rate hike at the upcoming September meeting.