UBS CEO Warns Investors Against Complacency as Risks Continue to Accumulate

UBS CEO Sergio Ermotti stated that despite the ongoing accumulation of geopolitical and economic risks, investors have become increasingly complacent, and the market should have experienced greater volatility. Ermotti pointed out that the energy and shipping risks arising from the conflicts in Iran and Ukraine, global supply chain pressures, high inflation, and elevated borrowing costs are still persistent. Although large-scale investments in areas such as artificial intelligence and data centers have supported economic growth, they are insufficient to eliminate potential risks. In terms of investment strategy, UBS clients have recently adopted a more diversified allocation across sectors and regions, rather than betting on a single market direction, while continuing to allocate to AI and technology assets. He emphasized that this does not mean that funds are fully withdrawing from the U.S. or the dollar, as the dollar remains the world's primary reference currency. Regarding interest rates, Ermotti expects that the European Central Bank, the Federal Reserve, and the Bank of Japan may raise rates in the coming months, and the market should not expect borrowing costs to quickly return to low levels, as inflationary pressures have not yet significantly eased. Maintaining interest rates at a high level for the foreseeable future remains a reasonable expectation.

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