Future economic indicators will decide Fed's next steps: UBS

The Federal Reserve's next steps on interest rates will be guided by economic data, according to a report by UBS.

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While the major global markets reacted negatively to the change in rate cut cycles by the Fed for next year, the report noted that the Fed will continue to monitor the economic conditions and various data before taking any step.

It said, "We believe the Fed remains data-dependent, and future economic indicators will continue to play a significant role in shaping the US central bank's next steps."

The report noted that key indicators, such as the personal consumption expenditures (PCE) price index, will play a critical role in shaping the central bank's policy.