Global economic activity will expand 3.2% this year, the financial institution said.
The economist said that the likelihood of the Fed hiking interest rates is low, but not zero.
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.
Strategists say deals can be found in certain types of Build America Bonds.
Many bond investors have been caught wrong-footed this year over inflation.
The push for ETF rule changes has heated up to the point that even major stock exchanges are getting involved.
Yields on two- to 10-year notes tumbled as much as 10 basis points at one stage.
Confidence for a relatively shallow drawdown is supported by broad market breadth, cyclical leadership trends and economic resiliency.
About one-fifth of U.S. homeowners have a mortgage with less than 3% interest.
The investment company is forecasting that inflation will finish the year at about 3.5%.
With stocks and bonds moving increasingly in tandem, investors have been forced elsewhere for protection.
Global yields rose today as markets adjusted to central banks keeping interest rates higher for longer.
Fed President John Williams said he expects “bumps along the way” in the effort to rein in inflation.
The Philadelphia Fed said almost 3.5% of card balances were at least 30 days past due at December's end.
The economist said there could be a growing gap between the pace of Fed and ECB easing.
The $3.6 trillion asset manager thinks the Fed will front-run monetary easing ahead of the presidential election.
The Treasury market has struggled to find a bottom this year as the economy has defied gloomy forecasts.
“There's no urgency right now,” Dallas Fed President Lorie Logan said.
The Fed is likely to look past signs of economic resilience and start easing its monetary policy, the economist said.