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While it remains a matter of curiosity when the FED will cut interest rates, the PCE data, which the FED follows as a leading data on inflation, was announced today.
While the above-expected PCE data was considered a signal that interest rate cuts may be delayed, Nigel Green, CEO of deVere, one of the world's largest asset management companies, warned that there is a high probability that the FED will not reduce interest rates this year.
Evaluating the announced PCE data, deVere CEO stated that interest rate cuts may be delayed until 2025 and said:
“These data are another setback in the Fed's fight against inflation. The latest figures from the PCE, the Federal Reserve's preferred inflation measure, highlight that inflation continues at higher levels than expected despite the high interest rates used to reduce inflation.
We are now revising our interest rate cut forecast, with the US economy remaining consistently strong and defying expectations, the strong labor market, rising PPI and CPI, and other recent data, as well as the PCE data released today.
We think U.S. central bank officials will need several months in a row of data showing that inflation is actually moving toward the 2% target before they consider changing their monetary policy stance.
As a result, we estimate that the FED will refrain from reducing interest rates until 2025. “
DeVere CEO finally told investors that they should adjust themselves in case there is no interest rate cut until 2025 and said, “Given the possibility that the Federal Reserve will not reduce interest rates this year, investors should consider investing portfolios to manage risks and take advantage of potential opportunities.” “They may need to adjust their rates.” said.
No rate cuts by Fed until 2025? https://t.co/hntFXwxFrp @NEWSMAX
— deVere Group (@deveregroup) April 26, 2024
*This is not investment advice.