According to the Futubull Financial News app, UBS Group's office of the Chief Investment Officer for Wealth Management in the Asia Pacific region stated that the Federal Reserve is a latecomer in the global monetary easing cycle. The European Central Bank has already lowered interest rates twice. The Swiss National Bank, the Swedish Riksbank, the Bank of Canada, the Reserve Bank of New Zealand, and the Bank of England have also lowered interest rates. However, Federal Reserve Chairman Powell emphasized that the Federal Reserve does not believe it is lagging behind the situation. He stated that the US economy remains strong and the labor market remains robust. Despite the 50 basis point rate cut, the committee is not in a hurry to further reduce interest rates.

UBS Wealth Management pointed out that the Federal Reserve's updated economic forecasts confirm Powell's statement that the committee does not believe that the risk of recession is rising. The Federal Reserve now expects the unemployment rate to be 4.4% by the end of this year, which is slightly higher than the 4% forecast in the June meeting, but still below historical standards. The forecast for the end of next year remains at a low level of 4.4%. At the same time, the Federal Reserve expects GDP to achieve steady growth, with a year-on-year growth of 2% in the fourth quarter of this year, and a similar growth rate in the next three years. This is in line with the bank's expectations for the US economy.But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.confirm.

The dot plot, which reflects the rate expectations of Federal Reserve officials, shows that there will be two more 50 basis point rate cuts in the remaining policy meetings of this year, and an additional 100 basis point rate cut in 2025. This is in line with the bank's expectations for the Fed's loose monetary policy. Historically, the US market has performed well when interest rates are cut in non-recessionary periods, and this time is unlikely to be an exception. The bank's benchmark scenario is still that the S&P 500 index is expected to rise to 5900 points by the end of the year, and further rise to 6200 points by the end of June 2025.

Against this backdrop, UBS Wealth Management believes that investors should consider deploying for a downward interest rate. Given that evidence shows that inflation is under control, the Federal Reserve can now focus on supporting employment and growth while reducing the probability of a recession. The bank's benchmark scenario is still to cut interest rates by 100 basis points throughout 2024. As cash returns decline, investors may consider reallocating cash and money market funds to high-quality companies and government bonds. These assets have demonstrated good value in recent volatile market conditions.

The bank also believes that the scope of the stock market's rise is expected to expand, and growth stocks may have sustained upside potential, especially in the technology sector. In the technology sector, artificial intelligence (AI) may become a key driver of market returns in the coming years, so it may be worth considering increasing exposure to this sector. Although sector volatility may increase in the next few months due to cyclical and geopolitical risks, this also provides an opportunity to establish a long-term position in AI at more reasonable prices.

In addition, UBS Group Asset Management recommends that including alternative assets in a well-diversified investment portfolio can help navigate changes in the macroeconomic environment. The bank believes that alternative assets are a strategic source of diversification and risk-adjusted returns. Hedge funds with low correlation to traditional assets may help reduce portfolio volatility. However, alternative assets come with their unique risks, including insufficient liquidity and low transparency.