UBS now expects the Federal Reserve to cut interest rates by 100 basis points this year, up from a previous forecast of 50 basis points. Unless the August jobs report is strong, UBS believes the Fed will begin an easing cycle with a 50 basis point rate cut at its September meeting, UBS said in its report. "Our baseline judgment remains that the U.S. economy will avoid recession and growth will remain close to its 2% trend. With interest rates at 23-year highs, the Fed has enough flexibility to support the economy and markets." Households overall are in good financial shape, real incomes are growing, average debt service costs remain low compared to historical averages, and total net wealth has increased 37 percent since the epidemic began.