UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - The final stretch
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Dec 1, 2025 In this insightful discussion, Jason Draho, Head of Asset Allocation for the Americas at UBS, shares his expertise on macroeconomic trends and portfolio strategies. He delves into the expectations around a December Fed rate cut and the implications of a likely new Fed Chair, Kevin Hassett. Jason also highlights the impact of a government shutdown on economic data and explores the reasons behind recent market rebound, linking it to shifting investor sentiment toward AI and growth sectors.
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Fed Heading Toward A Hawkish Cut
- The Fed is likely to cut rates in December or January as policymakers focus on softening labor-market signals despite contained inflation.
- Expect a hawkish cut with guidance to pause and monitor incoming payroll data before further moves.
Watch Payrolls After The Cut
- Monitor incoming labor-market releases closely after the December cut because the Fed will likely pause to assess October and November payrolls.
- Use the January data sequence to reassess whether further cuts are warranted.
Probable Fed Chair Could Shift Dovish Tilt
- Kevin Hassett is the likely Trump pick for Fed chair and would probably lean toward more room for rate cuts by arguing a lower neutral rate.
- His nomination could push the Fed more dovish, but inflation persistence or market reaction could limit aggressive easing.