UBS CEO Warns: Risks Continue to Build, While Investors Are Growing More Complacent
On September 10, UBS CEO Sergio Ermotti said today that despite the ongoing accumulation of geopolitical and economic risks, investors have become more complacent in recent years, and the current market should have seen greater volatility. Ermotti noted that energy and shipping risks stemming from conflicts involving Iran and Ukraine, global supply-chain pressures, high inflation, and high borrowing costs are still persisting. He said that large-scale investment in areas such as artificial intelligence and data centers, while supporting economic growth, is not enough to eliminate underlying risks. Regarding investment strategy, he said that UBS clients recently have been taking more diversified allocations across industries and regions rather than betting on a single market direction, while still continuing to allocate to AI and technology assets. He emphasized that this does not mean funds are withdrawing across the board from the United States or the U.S. dollar; the dollar remains the world’s primary “reference currency.” On interest rates, Ermotti expects that the European Central Bank, the Federal Reserve, and the Bank of Japan may all raise rates in the coming months, and markets should not expect borrowing costs to drop quickly back to low levels. He believes that inflationary pressure has not yet clearly eased, and that it is reasonable to expect rates to remain at relatively high levels for some time ahead.
On September 10, UBS CEO Sergio Ermotti said today that despite the ongoing accumulation of geopolitical and economic risks, investors have become more complacent in recent years, and the current market should have seen greater volatility. Ermotti noted that energy and shipping risks stemming from conflicts involving Iran and Ukraine, global supply-chain pressures, high inflation, and high borrowing costs are still persisting. He said that large-scale investment in areas such as artificial intelligence and data centers, while supporting economic growth, is not enough to eliminate underlying risks. Regarding investment strategy, he said that UBS clients recently have been taking more diversified allocations across industries and regions rather than betting on a single market direction, while still continuing to allocate to AI and technology assets. He emphasized that this does not mean funds are withdrawing across the board from the United States or the U.S. dollar; the dollar remains the world’s primary “reference currency.” On interest rates, Ermotti expects that the European Central Bank, the Federal Reserve, and the Bank of Japan may all raise rates in the coming months, and markets should not expect borrowing costs to drop quickly back to low levels. He believes that inflationary pressure has not yet clearly eased, and that it is reasonable to expect rates to remain at relatively high levels for some time ahead.