Report published September 7, 2026

UBS Weekly Global Outlook: Fed Rate Hike Expectations, ECB Decisions, and AI Infrastructure Resilience

UBS · September 7, 2026

UBS has revised its Fed outlook to two 25bps rate hikes in 2026 following stronger-than-expected August payrolls, but maintains a constructive view on equities driven by resilient growth and AI spending. In Europe, an expected 25bps rate increase from the ECB is anticipated to be followed by an extended pause, leaving Eurozone equities attractive.

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Finvaulta summarizes UBS's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Following a surge in August US nonfarm payrolls (+162,000), UBS shifted its base case to two 25bps Fed rate hikes in 2026 (September and December), but remains positive on equities as rate hikes reflect growth resilience.
2.The ECB is expected to raise rates by 25bps to 2.50% this week followed by an extended pause; UBS remains Attractive on Eurozone equities supported by cyclicals and structural investment.
3.AI infrastructure demand remains resilient, supported by raised guidance from Broadcom and results from Nvidia, with investors advised to diversify exposure across the wider value chain, including utilities and power infrastructure.

Will inflation temper the Fed's hawkish turn?
The Fed, inflation, and bond markets
The ECB and Europe
AI and the tech outlook
Will the ECB signal that its hiking cycle will be limited?
Can AI infrastructure spending sustain market confidence?
Chart of the week
Strong US labor data raise the prospects of Fed hikes
Non-Traditional Assets
Global asset class preferences definitions

Report data

Strong US labor data raise the prospects of Fed hikes

Metric	Estimate	Context
US Nonfarm Payrolls Change	162000 jobs	Surpassed consensus expectations of 55,000, pointing to an acceleration in hiring.
US Private Payrolls Change	127000 jobs	Private employment increase in August.
Eurozone Headline Inflation	3.3%	Accelerated from 2.9% in July, driven almost entirely by higher energy costs.
Eurozone Core Inflation	2.4%	Eased from 2.5% in July.
Eurozone Manufacturing PMI	52.7 index points	Highest reading since May 2022.