UBS On-Air: Market Moves Signal over Noise with Ulrike Hoffmann-Burchardi
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Dec 8, 2025 Ulrike Hoffmann-Burchardi shares insights on turning macro headwinds into potential tailwinds for the coming year. She anticipates a likely Fed rate cut driven by lower inflation and a soft labor market. Improving consumer sentiment, especially among younger demographics, points to economic optimism. Exciting trends in AI demand are highlighted, showcasing innovative applications in commerce and healthcare. With supportive policies, there’s potential for a Santa Claus rally in equities by year-end.
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Monetary And Fiscal Policies Now Working Together
- U.S. monetary and fiscal policy are aligning as simultaneous support rather than offsetting each other.
- This rare combination increases the chance of macro tailwinds into next year.
Position For Imminent Fed Rate Cuts
- Expect a 25bp cut on Wednesday and watch subsequent Fed moves that will be data dependent.
- Prepare for a likely final 25bp cut in Q1 2026, bringing total cuts to about 100bps.
Inflation And Jobs Signal Easier Policy
- Lower-than-expected inflation and a softening labor market justify eased monetary policy.
- Declining median inflation expectations and weak payroll signals support further cuts.