UBS Sees Double Rate Hike by Fed in 2026 Following Strong US Jobs Data

UBS has revised its forecast for Federal Reserve interest rate hikes in 2026. The bank now expects two 25-basis-point increases, one in September and another in December.

This change comes after stronger-than-expected US employment data showed that the labor market remains resilient. Employers added 162,000 jobs in August, exceeding market expectations.

UBS's revised forecast was also echoed by other financial institutions, including Citigroup and Macquarie. These banks changed their predictions for Fed interest rates following the release of the employment data.

Fed Governor Christopher Waller stated that he could support a decision to keep interest rates unchanged if incoming data showed inflationary pressures continuing to ease.