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Andrew Dubinsky: latest market views
UBS
Summary
Andrew Dubinsky is an Executive Director and Senior U.S. Economist at UBS Global Wealth Management's CIO office, who previously worked at Morgan Stanley Investment Management and Goldman Sachs as a fixed income strategist and economist.
Chorus has 10 views from Andrew Dubinsky across 2 episodes on UBS On-Air since October 29, 2026.
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AI isn't yet visibly disrupting aggregate US jobs; the damage is concentrated in high-tech and young workers.
UBS's view is that AI is not yet visibly disrupting the aggregate labor market. The unemployment rate has drifted lower since the spring AI-layoff headlines, and occupations and industries with high AI exposure are not doing worse in aggregate than low-exposure ones. The pressure shows up in pockets. BLS data show high-tech employment (software developers, computer systems designers) down about 1.4% year over year, versus modestly positive job growth overall. Within highly exposed occupations, workers in their early 20s and 30s show mid-to-low single-digit job contraction year over year, per Stanford Digital Economy Lab data. Construction employment in AI-exposed areas, by contrast, is growing about 3% year over year and accelerating, which mutes the aggregate impact.
“we just weren't seeing huge signs of it in the aggregate job growth and really had to zoom in on certain sectors.”at 1:15
UBS On-Air: Top of the Morning: The AI Economy 4Q26 update - Part 2 ·
AI stock gains are lifting US consumer spending through the wealth effect by a few tenths of growth.
AI-linked stocks have risen sharply, and this has made households feel wealthier. That wealth effect drives more spending. Andrew estimates that at least a few tenths of extra consumption growth can be linked to AI stock gains. This is the indirect channel through which AI feeds US growth, alongside the direct investment spending he describes.
“that wealth effect leading to more spending. So we're looking at at least a few tenths of extra consumption growth that are, I would say, are linked to AI stock gains.”at 4:29
UBS On-Air: Top of the Morning: The AI Economy 4Q26 update - Part 2 ·
AI infrastructure & data centers
AI-related investment is a resilient tailwind, adding about three quarters of a point to US growth.
AI affects US growth through two channels. The first is indirect: AI stock gains produce a wealth effect that lifts consumption. The second is direct: AI-related equipment and other investment appear in the national accounts. After adjusting for inflation and for the import content of much of this investment, that spending has added about half a percentage point to GDP growth over the past four quarters. Combined with the wealth effect, AI adds roughly three quarters of a point to growth. Andrew describes this as a resilient tailwind and one reason the US has absorbed energy shocks smoothly.
“...that equipment spending ... adds up to around half a percentage point after you adjust for the fact that much of the investment involves imported goods... So together, those two effects are adding up to, let's say, three quarters of a percentage point of growth and a pretty resilient tailwind.”at 4:59
UBS On-Air: Top of the Morning: The AI Economy 4Q26 update - Part 2 ·
AI demand is still net inflationary through elevated digital goods prices, a key concern for the Fed.
Digital goods prices, which used to deflate at a steady pace, are still rising, and part of that is AI demand. Some of the recent price movement was revised away, but the underlying trend shows positive inflation. Andrew expects more supply to come online, easing key bottlenecks and slowing digital goods inflation. He flags an open question about whether AI ultimately becomes a source of disinflation, deflation or inflation. For now he judges AI to be net inflationary. The Fed is watching this as it weighs tightening policy, and the AI demand story has not faded yet.
“For now, it's still net inflationary. And one of the key themes the Fed is watching when it's thinking about tightening policy.”at 6:24
UBS On-Air: Top of the Morning: The AI Economy 4Q26 update - Part 2 ·
Fed will likely hike again in December and March; the October hold was a compromise.
The Fed held in October, which was not a surprise, but the statement called economic activity strong and two members dissented in favour of a hike. The chair leaned on improvements since the September hike rather than the bad inflation data, and guided to gradual policy adjustments rather than a large cycle. Dubinsky reads the broad support for the hold as a compromise: members did not dissent in exchange for high confidence that there would be at least a hike in December. His view is still a December hike and another in March, because little new inflation data arrives before the December meeting to derail inflation that is elevated at slightly over 3%. He would revisit if financial conditions tightened enough to substitute for a March hike, which could mean one fewer hike.
“So our view is still another hike in December and another hike in March because there's just not a lot of new inflation data in between.”at 2:25
UBS On-Air: Top of the Morning: FOMC reflections & US economic update ·
Middle East conflict and supply-chain pressures are upside risks that skew inflation risks higher.
Dubinsky says there is still a pretty kinetic conflict in the Middle East, and supply-chain upside risks still seem quite relevant and have not improved much. Together with AI demand pressure, these upside risks are not looking favourable, so the skew of risks for inflation is unfavourable. These are among the key factors the Fed and UBS are watching, and they could change the outlook.
“Obviously we still have a pretty kinetic conflict in The Middle East and supply chain upside risk still seem quite relevant and haven't improved that much.”at 4:00
UBS On-Air: Top of the Morning: FOMC reflections & US economic update ·
US growth is strong; Q3 GDP at 3.4% reflects robust private demand and AI-linked investment.
Growth in the first half of the year was in the mid-2% range, and the first estimate for Q3 came in at 3.4%, above expectations. Dubinsky cites very strong private demand, with strong consumption and really strong business investment linked to the AI capex cycle. He calls the growth picture quite strong and says there is no way to avoid saying so.
“Growth is quite strong. The first half of the year in the mid 2% range for growth and this third quarter we have the first estimate at 3.4% which is a little bit above the expectations.”at 5:05
UBS On-Air: Top of the Morning: FOMC reflections & US economic update ·
AI infrastructure & data centers
AI-linked business investment is a very strong driver of current US economic growth.
In describing the strong Q3 GDP print, Dubinsky points to very strong private demand, including really strong business investment linked to the AI capex cycle. He presents this as one of the drivers of the strong growth backdrop. He does not discuss its longer-term durability.
“and really strong business investment linked to the AI, CapEx cycle.”at 5:31
UBS On-Air: Top of the Morning: FOMC reflections & US economic update ·
US consumer spending will moderate toward roughly 2% growth, not slow sharply.
Consumer spending has been growing faster than income, and some of today's monthly data showed slowing. Dubinsky expects some moderation as a result, but not a dramatic slowdown. He expects spending to settle back closer to a roughly 2% pace.
“we do see some moderation in consumer spending because it has been growing at a faster clip than income... we're not looking for a dramatic slowdown but just something back closer to the 2% or so range.”at 5:45
UBS On-Air: Top of the Morning: FOMC reflections & US economic update ·
US inflation should fall to mid-to-high 2% by end of Q1 as oil and tariff shocks lap.
Inflation is still firm on a year-over-year basis and is slightly over 3% going into year end. Dubinsky expects the key supply shocks to hit their one-year anniversaries around the turn of the year: the oil price shock, and the large tariff-driven inflation. Lapping those shocks should bring year-over-year inflation down to the mid-to-high 2% range by the end of Q1. He expects inflation to remain above target into 2027, so the disinflation is gradual rather than a return to target.
“essentially a one year anniversary of really big tariff inflation and that should help year over year inflation rates come down to the mid to high 2% range as we get to the end of Q1.”at 6:35
UBS On-Air: Top of the Morning: FOMC reflections & US economic update ·
Shows
- UBS On-Air · 2 episodes
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