UBS Sticks With Forecasts

ByJohn S. McClenahen UBS Investment Research is staying with its forecasts for inflation-adjusted GDP growth of about 4% in the current quarter and around 3.5% in the fourth quarter. Among the reasons, says chief U.S. economist Maury Harris, are August's employment numbers (144,000 jobs were created) and the "firming" of company pricing power. "In this setting, we still expect the Federal Reserve System to raise the federal funds rate by another 25 basis points to 1.75% at its next Federal Open Market Committee (FOMC) on Sept. 21, and we also continue to anticipate a 2% fed funds [target] rate at year-end," says Harris.