.Sergio Ermotti, ceo of UBS GroupStefan Wermuth|Bloomberg|Getty ImagesZURICH, Switzerland u00ea u00b7 UBS chief executive officer Sergio Ermotti pointed out Wednesday that market dryness could possibly escalate in the 2nd one-half of the year, yet he carries out not feel the united state is actually moving in to a recession.Global equities observed stinging sell-offs last week as capitalists digested weak financial records out of the united state which raised anxieties about an economic slump in the world's largest economic climate. It also raised questions regarding whether the Federal Get needed to be a lot less hawkish with its own financial policy stance. The central bank always kept rates on hold in overdue July at a 23-year high.When asked them about the overview for the U.S. economic condition, Ermotti pointed out: "Not automatically an economic slump, but absolutely a lag is actually feasible."" The macroeconomic red flags are not clear adequate to discuss economic slumps, and also really, it's possibly premature. What we understand is actually that the Fed has sufficient capacity to come in and assistance that, although it's heading to take some time, whatever they perform to become then transmitted in to the economic situation," the chief executive officer said to CNBC on Wednesday after the financial institution mentioned its second-quarter results.UBS anticipates that the Federal Book are going to cut rates by at least 50 basis factors this year. Right now, investors are actually divided between a fifty as well as a 25 manner point cut at the Fed's upcoming meeting in September, according to LSEG data.Speaking to CNBC, Ermotti stated that our team are most likely to find much higher market dryness in the 2nd one-half of the year, somewhat because of the united state political election in Nov." That's one element, however likewise, if I take a look at the general geopolitical photo, if I check out the macroeconomic photo, what our experts viewed in the last couple of full weeks in relations to dryness, which, in my point of view, is actually a crystal clear indicator of the delicacy of some elements of the device, u00e2 $ u00a6 one ought to count on definitely a greater degree of volatility," he said.Another unpredictability moving forward is actually financial policy and whether reserve banks will certainly have to cut prices much more strongly to deal with a downturn in the economic condition. In Switzerland, where UBS is headquartered, the central bank has actually cut costs twice this year. The European Central Bank and the Financial Institution of England possess both introduced one cut until now." Recognizing the events which are actually theu00c2 unknowns at hand like the USA presidential election, our team became satisfied with an incredibly reduced volatility, currently we are shifting to a much more typical program," Bruno Verstraete, founder of Lakefield Riches Administration said to CNBC Wednesday." In the context of UBS, [more dryness is actually] not always a poor point, because more dryness implies even more trading earnings," he added.