The firm is betting on a half-point cut in June and 150 basis points of easing by the end of the year.
UBS strategists see a growing possibility that inflation fails to decline to the Fed's target.
Many bond investors have been caught wrong-footed this year over inflation.
The investment company is forecasting that inflation will finish the year at about 3.5%.
The $3.6 trillion asset manager thinks the Fed will front-run monetary easing ahead of the presidential election.
The world's biggest money managers think a global slowdown will have traders flocking to the dollar.
Declines in inflation will enable the central bank to start easing policy as soon as March, the bank's analysts say.
Strategists have rolled out macro reports telling clients how to trade the energy price shock.
This week's rally in the Russell 2000 has surpassed moves in the Nasdaq by nearly 5%.
Traders are finding refuge in top-quality bonds, especially short-term securities.
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