Amanze Chinonye
A half-point interest rate cut is now a strong possibility from the Federal Reserve this month, according to Nigel Green, CEO of deVere Group, a leading financial advisory and asset management organization. This comes after a weak private sector hiring report, which added only 54,000 jobs in August, far short of the 75,000 forecast.
“The jobs engine of the world’s largest economy is sputtering,” Green says. “A 50-basis-point move is, we believe, now not only on the table but necessary.” The Fed’s decision on September 16-17 is highly anticipated, with markets previously pricing in a 25bp cut. Hwever, the recent data has changed the conversation, with Green noting that “a small cut risks looking timid in the face of mounting weakness.”
Green in a statement made available to Prime Business Africa said: “A decisive half-point reduction would provide immediate stimulus, lift market confidence, and send a strong signal that the Fed is prepared to act to prevent a deeper downturn.
“Investors need to recognize what’s at stake here. A half-point cut would weaken the dollar further, boosting US equities, particularly tech and growth names that thrive in lower-rate environments.”
Join our WhatsApp ChannelGreen further notes that the United States is “entering a new phase. For years, the Fed led the tightening cycle. Now it must lead the easing cycle. Hesitation carries the risk of a confidence shock,” he says.
Market Implications:
A 50bp cut would likely trigger a more powerful repricing across asset classes, with potential benefits including a weaker US dollar, boosting equities and emerging markets. Other impacts include increased liquidity in emerging markets with compelling valuations
Gains in gold and Bitcoin are also expected as investors seek hedges against currency volatility and inflation risk
Investor Action:
Green advises investors to realign their portfolios for an environment of falling rates and a softer dollar, with greater exposure to equities, international assets, and diversifiers like gold and Bitcoin. “The time to act is before the Fed delivers, not after,” he concludes.
Other notable predictions include: Bank of America forecasting two US Fed rate cuts this year, in September and December, Standard Chartered expecting a 50bps rate cut in September, a shift from their prior forecast of 25bps.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
