UBS Lowers Forecasts for US Markets, Warns of Economic Recession

A report issued by UBS Global Wealth Management predicts that US GDP growth this year will be less than 1%, warning that the US economy is at risk of recession amid growing signs of an economic slowdown.

The forecast indicates that GDP could contract by 1% from its peak to its lowest level over the course of the year, reflecting continued economic pressures.

The report explained that risks to US economic growth have become more apparent, with slowing consumer spending and further tightening of monetary policy limiting economic momentum.

Concerns are growing about the impact of higher interest rates on vital sectors, which could lead to a further deterioration in the US economy.

In light of these expectations, the bank revised its rating for US markets, lowering its stock rating from “attractive” to “neutral,” reflecting diminishing confidence in the ability of financial markets to perform well in the future. The bank also lowered its target for the S&P 500 to 5,800 by the end of 2025, down from 6,400, indicating that the market outlook has become more uncertain. These warnings come at a sensitive time, as markets are monitoring the upcoming decisions of the US Federal Reserve, which will have significant impact on the economy, amidst a focus on inflation and monetary policy as key factors determining the path of growth in the coming months.