September’s job growth of 254,000, far surpassing expectations and unemployment ticking down to 4.1%, the Federal Reserve will likely respond with a controlled 25 basis point rate cut next, predicts the CEO of one of the world’s largest independent financial advisory and asset management organization.
deVere Group’s Nigel Green says: “While some in the market may be hoping for a more aggressive 50 basis point cut, a steady 25 basis points aligns with historical easing patterns, ensuring stability while capitalizing on economic momentum.
“A 25 basis point cut positions equities to benefit from lower borrowing costs and continued consumer strength, particularly in key growth sectors like tech and consumer goods.
“The Fed’s anticipated 25 basis point cut is a solid step towards creating a robust investment environment. This move would reflect confidence in the labor market’s strength and offers a stable backdrop for investors looking to capture growth opportunities across sectors.
“This is what a soft landing looks like.”
He continues: “We believe this is an ideal environment for investors to explore new opportunities. The Fed’s anticipated decision supports market growth and offers a chance for strategic, long-term gains.”
It was, says the deVere CEO, still a wise move for the Fed to implement a larger half-point rate cut in September, effectively serving as a safeguard to protect against potential weakening in the labor market, which had shown signs of slowing before the latest report.
