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0 News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/us-labor-market-strength-signals-no-immediate-rate-cuts-says-devere-ceo/
The latest US jobs report suggests that the Federal Reserve is unlikely to cut interest rates in the foreseeable future, according to Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations.
With 256,000 jobs added in December, far exceeding expectations, and the unemployment rate falling to 4.1%, the report highlights the ongoing strength of the US economy. These figures, combined with persistently high inflation, underscore the Fed’s commitment to maintaining its current policy stance, Green argues.
“This data confirms what we’ve been saying for a couple of months: the Fed’s not cutting any time soon,” Green stated. “The robust labor market and high inflation provide compelling reasons for the Fed to keep interest rates elevated.” While some had speculated that the central bank might implement monetary easing in 2025, Green suggests that the latest report decisively quashes those hopes.
Despite a moderation in inflation from its peak, it remains well above the Fed’s 2% target. The strong jobs market, bolstering consumer spending, continues to fuel price pressures, making it difficult for the Fed to justify rate cuts without risking a resurgence of inflation. “The latest jobs report is a wake-up call for anyone betting on rate cuts in the near term,” Green added. “The Fed’s priority remains clear: to control inflation and sustain economic stability.”
Green’s message to investors is clear: they must adapt their strategies to a new economic reality, where interest rates are likely to remain elevated. This presents both challenges and opportunities. Fixed income investments are becoming increasingly attractive, with higher yields offering compelling prospects. Moreover, sectors resilient to higher borrowing costs, such as technology and healthcare, continue to show growth potential.
However, Green cautions that complacency could be detrimental. “Markets are inherently forward-looking, and those who delay repositioning their portfolios risk falling behind,” he warned.
The strong jobs report also helped buoy the US dollar, as higher yields attract global capital. This presents challenges for emerging markets, where dollar-denominated debt becomes more expensive, but also offers opportunities for savvy investors to capitalize on currency fluctuations.
Green advises clients to adopt a proactive approach in the current environment. “In this climate, cash is not king – strategic investment is. Diversification, careful sector selection, and a focus on quality assets will be crucial for navigating the months ahead.”
The Federal Reserve’s next policy decision is expected on January 29, and Green’s analysis suggests that it is unlikely to bring any immediate changes in interest rates given the resilience of the labor market and ongoing inflationary pressures.
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/us-labor-market-strength-signals-no-immediate-rate-cuts-says-devere-ceo/
