The Federal Reserve’s decision to slash interest rates by 50 basis points—its first cut in four years—has been welcomed by investors and market participants.
However, Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations, comments that the Fed “must not now lose its nerve” and needs to remain aggressive.
He says: “This larger-than-expected cut is an encouraging step in the right direction. But to truly realize the long-term benefits of today’s decision, the Fed must continue to show resolve. It needs to keep up the pace with further rate cuts, with another 50 basis points in December and more into 2025.
He and other market experts caution that the Fed risks undoing today’s progress if it pauses too soon.
“A failure to follow through on further cuts would likely undermine confidence and signal that the Fed lacks the commitment needed to fully stabilize the economy,” the deVere CEO continues.
Although today’s rate cut has generated optimism, it is viewed by many as just the first step in a broader, more prolonged journey to settle the economy.
Financial strategists warn that without additional rate reductions in the coming months, the benefits of this initial move could diminish, leaving the economy vulnerable.
“The time lag between policy changes and their real-world impact is crucial,” Nigel Green explains. “We might not see the effects of today’s decision immediately, but if the Fed hesitates next time, it risks sending mixed signals to the markets and stalling the efforts.”
Investors see this “decisive action as a vital measure” to support business investment, consumer spending, and overall economic growth.
The rate cut is expected to relieve some pressure on businesses by reducing borrowing costs, while also stimulating consumer confidence and spending.
Yet, for this momentum to truly continue, experts agree that additional strategic rate cuts will be essential. “A single rate cut will not be enough to address the deeper economic challenges,” notes the deVere Group chief executive.
“While this action shows the Fed is willing to be bold, they must continue down this path to ensure sustained economic strength. Failing to act further would jeopardize the reaction we’ve seen today and could leave both the markets and the broader economy exposed to renewed risks.”
Nigel Green concludes: “The Federal Reserve has demonstrated today that it can act with boldness, but it cannot afford to signal weakness moving forward.
“Additional cuts - another 50 basis points in December and more into 2025 - will be critical to reinforcing market confidence, driving economic growth, and ensuring the stability of both the US and global economy.”