Market's record run has stamina, predicts UBS' Evan Brown ahead of Fed meeting

Market Outlook - UBS Asset Management has a bullish outlook on the market ahead of the Federal Reserve's interest rate decision [1] - The firm expects a 25 basis points cut this week, with a total of 75 basis points of cuts anticipated over the next three meetings [3][4] Federal Reserve's Position - There is a significant discrepancy between market expectations and the Fed's projected rate easing, with 150 basis points priced in by the end of next year, while the Fed suggests it will take years to reach those levels [2] - The Fed is facing pressure from hawkish regional presidents who are reluctant to cut rates aggressively, despite Chairman Powell's inclination to ease [4] Labor Market and Inflation - The labor market remains a primary concern for the Fed, with an unemployment rate increase of 8 basis points last month, but initial jobless claims have not spiked yet [6][7] - Inflation is still a pressing issue, and the Fed is monitoring how tariffs and other factors may influence future inflation numbers [12] Economic Segments - The economy is currently characterized by three distinct segments: a recessionary housing market, a booming AI capital expenditure sector, and a resilient consumer market that is expected to slow down [9][10] - The Fed's neutral rate is estimated at 3%, but there is uncertainty regarding its exact level due to varying financial market conditions [10][11]