The worldwide tariff shock is more likely to worsen earlier than it improves, in line with UBS.
Whereas an about-face from the Trump administration or court docket injunctions reversing the levies are potentialities, the Swiss financial institution expects that “within the close to time period we predict it’s extra probably that [the] information stream continues to worsen, together with potential EU retaliation, US counter-retaliation on China, and an finish to exemptions on prescribed drugs and semiconductors”.
Mark Haefele, chief funding officer at UBS International Wealth Administration, mentioned tariffs may rise additional initially, adopted by reductions in levies through the third quarter “as authorized, enterprise and political strain mounts”.
He forecast that the Fed would reduce rates of interest by 75-100 foundation factors to assist the financial system.
