UBS has outlined its base case for the US economy in the wake of US President Donald Trump’s second-term economic agenda, projecting continued growth despite potential challenges from tariffs. While tariffs are likely to rise, they are not expected to derail US economic expansion. UBS expects inflation to continue its downward trajectory, even as new trade policies take shape.
One of the key predictions from UBS is that Federal Reserve will likely reduce interest rates by 50 basis points in 2025, providing a further boost to economic activity. This anticipated rate cut follows a forecast of slower inflation, which should ease pressure on monetary policy, and support broader market stability.
Despite potential tariff increases, US equity markets will face volatility in the near term, but will ultimately trend higher, according to UBS. S&P 500 is forecast to reach 6,600 by the end of…
