The US Federal Reserve (Fed) will likely respond to the latest economic data with a controlled 25 basis point (bps) rate cut in Fed’s next meeting, according to deVere, one of the world’s largest independent financial advisory and asset management organisations.
The positive labour data showed that September’s job growth of 254,000 had far surpassed expectations and unemployment rate was down to 4.1%
“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 capitalising on economic momentum,” stated deVere’s Chief Executive Officer (CEO), Nigel Green, in a press release.
“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.”
“This is what a soft landing looks like.”
He added that the rate cut will shape an ideal environment for investors to explore new opportunities as the Fed’s anticipated decision supports market growth in addition to offering a chance for long-term strategic gains.
The CEO noted that, nevertheless, it is still a wise move for the Fed to implement a larger half-point rate cut of 50 bps to protect against sudden slowdown in labor market (and the economy) under unforeseeable circumstances.
