ZURICH, Switzerland ꟷ UBS CEO Sergio Ermotti said Wednesday that sell volatility could intensify in the second half of the year, but he does not believe the U.S. is heading into a recession.

Global equities saw natty sell-offs last week as investors digested weak economic data out of the U.S. which raised fears about an remunerative downturn in the world’s largest economy. It also raised questions about whether the Federal Reserve needed to be negligible hawkish with its monetary policy stance. The central bank kept rates on hold in late July at a 23-year principal.

When asked about the outlook for the U.S. economy, Ermotti said: “Not necessarily a recession, but definitely a slowdown is possible.”

“The macroeconomic withs are not clear enough to talk about recessions, and actually, it’s probably premature. What we know is that the Fed has enough content to step in and support that, although it’s going to take time, whatever they do to be then transmitted into the frugality,” the CEO told CNBC on Wednesday after the bank reported its second-quarter results.

UBS expects that the Federal Reserve longing cut rates by at least 50 basis points this year. At the moment, traders are split between a 50 and a 25 point of departure point cut at the Fed’s next meeting in September, according to LSEG data.

Speaking to CNBC, Ermotti said that we are right to see higher market volatility in the second half of the year, partially because of the U.S. election in November.

“That’s one factor, but also, if I look at the all-embracing geopolitical picture, if I look at the macroeconomic picture, what we saw in the last couple of weeks in terms of volatility, which, in my single out of view, is a clear sign of the fragility of some elements of the system, … one should expect definitely a higher step by step of volatility,” he said.

Another uncertainty going forward is monetary policy and whether central banks will compel ought to to cut rates more aggressively to combat a slowdown in the economy. In Switzerland, where UBS is headquartered, the central bank has cut rates twice this year. The European Primary Bank and the Bank of England have both announced one cut so far.

“Knowing the events which are the unknowns on the horizon like the U.S. presidential electing, we became complacent with a very low volatility, now we are shifting to a more normal regime,” Bruno Verstraete, founder of Lakefield Abundance Management told CNBC Wednesday.

“In the context of UBS, [more volatility is] not necessarily a bad thing, because more volatility portends more trading income,” he added.