UBS CEO Warns Markets Are Complacent as Investors Brace for 2 More Rate Hikes

2 articles · Updated · CNBC · Sep 10

Sergio Ermotti said markets have shown too little volatility despite rising geopolitical and economic risks, warning investors against holding overly strong convictions.
UBS clients are responding by diversifying across sectors and geographies while still backing AI and technology, though their overall asset allocation has changed little over the past year.
Ermotti said some money moved into emerging markets about a year ago, but mostly as excess cash deployment rather than a retreat from U.S. assets or the dollar.
Higher-for-longer rates are reinforcing that caution: he expects the Fed, ECB and Bank of Japan to keep tightening, with the Fed likely to deliver a couple more hikes in coming months.
The backdrop includes Iran- and Ukraine-linked energy and shipping risks, U.S.-China supply-chain strains, and sticky inflation that he said is still not abating.