The Federal Reserve will next cut US interest rates in September, and more likely October, predicts the CEO of one of the world’s largest independent financial advisory organisations.
deVere Group’s Nigel Green’s forecast comes as policymakers hold rates at 3.5% to 3.75% and confront a surge in inflation risks driven by war, energy prices, and persistent economic resilience.
“September, or more likely October, is now the realistic opportunity for a rate cut, and even that is far from guaranteed,” he comments.
“The data coming through is not consistent with easing in July. In fact, it points in the opposite direction.”
He continues: “Inflation is not falling fast enough. The latest wholesale inflation data shows prices rising at 3.4% year-on-year, the strongest pace in a year, and core measures are still running close to 4%.
“And that’s before the full impact of the oil shock feeds through.”
The geopolitical backdrop has shifted the policy landscape sharply. Oil prices have surged toward $95–$100 per barrel following the escalation of the Iran conflict, with US gasoline prices climbing to their highest levels since 2023.
“Energy is now the dominant macro driver again,” the deVere CEO explains.
“A near 50% jump in oil prices in a matter of weeks will not stay contained. It feeds directly into transport, production, and consumer prices.
“The Fed knows there’s a lag, and that lag is exactly why they will not cut prematurely.”
He adds: “Markets are still behaving as though inflation is under control. It isn’t.
“Core inflation is running around 3.1%, and policymakers are now openly considering the risk that it stays closer to 3% even into next year.”
Labour market data reinforces the case for patience rather than urgency. While hiring has softened, the unemployment rate remains relatively low at 4.4%, and wage pressures continue to circulate through the economy.
“Employment conditions are not weak enough to justify rate cuts,” says Nigel Green.
“Yes, job creation has slowed and there was a loss of around 92,000 jobs in February, but the broader picture is still one of resilience. Policymakers don’t need to step in to support the labour market yet.”
He adds: “A stable labour market removes the justification for easing. It allows the Federal Reserve to focus squarely on inflation, and inflation remains too high.”
Financial conditions also remain looser than policymakers would prefer. Equity markets have held up, credit remains available, and risk appetite has not materially reset despite elevated rates.
“Markets haven’t fully absorbed the reality of restrictive policy,” Nigel Green says.
“Investors appear to continue to price in cuts as if they are inevitable and imminent. The reality is that policy is likely to stay tight for longer than expected.”
He argues that the repeated delays in rate-cut expectations reveal a deeper misreading of the macro environment.
“Expectations have shifted from March to June, from June to July, and now beyond,” he notes.
“Each shift isn’t random. It reflects the same underlying issue: inflation is sticky, and the economy isn’t weakening fast enough.”
The risk environment is also becoming more complex. Rising oil prices are increasing the probability of stagflation, with sustained energy costs capable of lifting inflation while weighing on growth.
“The Fed is facing conflicting pressures, but inflation remains the dominant threat,” says the financial giant’s chief executive.
“Cutting rates into an energy-driven inflation cycle would risk repeating past policy mistakes.
“There’s even a growing probability in market pricing of further tightening rather than easing in the near term. This tells you how dramatically the outlook has shifted.”
Looking ahead, Nigel Green believes investors must abandon the assumption that rate cuts are just around the corner.
“The real story is not delayed cuts. It’s the possibility of no cuts for longer than markets are currently expecting,” he concludes.
