UBS(US:UBS) Sou Hu Cai Jing·2025-12-12 16:33Economic Outlook - UBS predicts a "moderate growth and inflation pressure" scenario for the US economy from 2026 to 2028, with GDP growth rates expected to be 1.6% in 2026 and 1.8% in 2027, indicating a gradual slowdown in economic expansion [1][3] - The current economic expansion is characterized by "narrow momentum" and "unstable foundations," with sectors like residential investment and non-residential construction already in decline [1][3] Inflation and Tariff Impact - Inflation pressure is identified as a core challenge, significantly driven by tariff policies, with the current average tariff rate at 13.6%, which has surged fivefold since the beginning of the year [1][3] - UBS estimates that tariffs will increase the core Personal Consumption Expenditures (PCE) inflation rate by 0.8 percentage points in 2026, maintaining a price increase around 3.5% even if other inflationary pressures ease [1][3] Labor Market Dynamics - The labor market is showing signs of cooling, with a risk of transitioning from "moderate slowdown" to "accelerated weakness," which poses a significant uncertainty for future economic performance [1][3] - Despite a gradual decline in job growth, the labor market remains resilient, but households outside the top 20% income bracket are experiencing a significant drop in liquidity, affecting their ability to cope with inflation [2][3] Policy and Technological Support - Policy adjustments, including potential interest rate cuts by the Federal Reserve in late 2026, and technological advancements, particularly in AI, are expected to support economic stability and growth [2][3] - The "One Big Beautiful Bill Act" (OBBBA) is anticipated to provide economic stimulus through tax reductions and corporate expense deductions, partially offsetting the deficit increase from tariff revenues [2][3] Market Strategy - UBS maintains an overweight stance on the US stock market, expecting it to navigate short-term economic headwinds while focusing on AI-driven profit corrections and policy support [2][3] - High-quality stocks are projected to continue driving strong earnings, with a weaker dollar providing additional advantages compared to European markets [2][3]