.Sergio Ermotti, ceo of UBS GroupStefan Wermuth|Bloomberg|Getty ImagesZURICH, Switzerland Double A u00b7 UBS chief executive officer Sergio Ermotti mentioned Wednesday that market dryness could possibly escalate in the 2nd half of the year, however he carries out certainly not believe the USA is moving right into a recession.Global equities observed sharp sell-offs recently as real estate investors digested unstable financial records out of the united state which raised concerns concerning an economical slump in the world's biggest economy. It additionally raised questions regarding whether the Federal Get needed to be less hawkish along with its own monetary policy standpoint. The reserve bank kept fees on grip in overdue July at a 23-year high.When asked about the expectation for the USA economy, Ermotti said: "Certainly not automatically a recession, but certainly a decline is possible."" The macroeconomic red flags are unclear sufficient to talk about recessions, and also in fact, it is actually perhaps untimely. What we understand is that the Fed has enough capacity to intervene and also help that, although it is actually heading to take some time, whatever they do to be at that point transferred into the economic situation," the CEO said to CNBC on Wednesday after the financial institution disclosed its second-quarter results.UBS anticipates that the Federal Get will definitely reduce rates through at least fifty manner points this year. Right now, investors are actually split between a 50 as well as a 25 basis factor cut at the Fed's upcoming appointment in September, according to LSEG data.Speaking to CNBC, Ermotti claimed that we are actually most likely to view much higher market dryness in the second one-half of the year, somewhat due to the U.S. political election in November." That's one factor, but additionally, if I check out the total geopolitical picture, if I examine the macroeconomic picture, what we observed in the final number of weeks in regards to volatility, which, in my point of view, is actually a clear sign of the fragility of some elements of the unit, u00e2 $ u00a6 one ought to expect certainly a much higher degree of volatility," he said.Another unpredictability going forward is financial plan as well as whether central banks will definitely need to cut costs extra aggressively to battle a lag in the economic situation. In Switzerland, where UBS is headquartered, the reserve bank has cut rates two times this year. The European Reserve Bank and the Banking Company of England possess both introduced one cut until now." Understanding the activities which are actually theu00c2 unknowns imminent like the USA governmental vote-casting, our team came to be contented with a really low volatility, now our experts are switching to an extra typical regime," Bruno Verstraete, creator of Lakefield Wide range Monitoring said to CNBC Wednesday." In the circumstance of UBS, [more volatility is actually] not automatically a negative factor, given that additional dryness implies more exchanging earnings," he added.