UBS AG Chief Executive Officer Sergio Ermotti said he expects investors to remain cautious over the coming months after the Federal Reserve refrained from reducing the $85 billion pace of its monthly securities buying.

“Client risk appetite is extremely low,” Ermotti, who heads the world’s largest wealth manager, said at the Invest 13 conference in Geneva. “I would have hoped to see tapering coming in” and its impact on economic growth, he said.

The policy-setting Federal Open Market Committee yesterday voted to maintain the pace of its monthly securities buying, sending stocks to record highs and triggering the biggest rally in Treasurys since 2011 as investors repositioned for a more accommodative central bank. Fed Chairman Ben S. Bernanke said the Fed must determine its policies based on “what’s needed for the economy,” even if it surprises markets.

While the Fed’s unexpected decision to abstain from tapering bond purchases boosted the Stoxx Europe 600 Index to its highest level since June 2008, it’s unlikely to soothe concerns of private banking customers who remain reluctant to invest “over the coming quarters,” said Ermotti.

“If a central bank has the oxygen necessary for this economic growth and that cannot be taken away without creating a series of dangers, people are really questioning the stability and long-term sustainability,” said Ermotti, 53.

‘Uncertainty’

Bernanke, 59, whose term ends Jan. 31, has kept interest rates near zero for almost five years and swelled the Fed’s balance sheet to a record of $3.66 trillion through buying Treasurys and mortgage-backed securities. He said he wanted to “wait a bit longer and to try to get confirming evidence” that the economy is showing signs of lasting improvement, while citing risks of “restrictive fiscal policies.”

Fed officials yesterday reduced their estimates for economic growth this year and next. They predicted U.S. gross domestic product to increase 2 percent to 2.3 percent this year, down from a June projection of 2.3 percent to 2.6 percent.

“The fact they have been reviewing their GDP growth forecast is a clear indication this uncertainty is there,” Ermotti said.