UBS Wealth Management has revised its forecast and now expects the Federal Reserve (U.S. central bank) to raise interest rates twice in 2026, with 25-basis-point increases in September and December. The moves would lift the federal funds target range from 3.50%-3.75% to 4.00%-4.25%. The change follows stronger U.S. job growth data released last Friday and July PCE inflation, a measure of personal consumption spending, rising 3.7% year over year, above expectations. Market pricing puts the probability of a September hike at about 60%, up from roughly 50%. UBS said the effect on economic growth should remain modest because of continued AI capital spending and maintained its view that growth will remain near trend levels.