ROBINSON RD, SINGAPORE / ACCESSWIRE / August 7, 2024 / Asia-based investment management firm, Derwent Investments has announced its expectation of a US interest rate cut from the US Federal Reserve in September 2024 in a research note sent to clients yesterday. Based on a comprehensive analysis of current economic indicators and market conditions, Derwent Investments believes that a rate reduction is likely to occur as part of the Federal Reserve's efforts to support continued economic stability.
Fed's dual mandate satisfied
Derwent Investments' Paul Decker, Head of Private Equity explains that inflation trends, global economic conditions and US labour market dynamics appear to support the need for a cut in interest rates as the world's largest economy heads towards its presidential election in November.
"Price stability and the promotion of maximum employment form the Federal Reserve's dual mandate so, with inflation appearing to be headed towards the central bank's 2% target and the labour market holding up well despite a deceleration in job creation and wage growth, we think September is highly likely to bring the first rate cut of this cycle," he said.
On the matter of global economic conditions, he cited signs of a slowdown in Europe and China as creating headwinds for the US economy. "A rate cut could help mitigate the impact of these external factors," he added.
Expert insights
According to the Derwent Investments' research note, the cut or, at least, the expectation of the cut in September, has implications for assets like stocks, fixed income and commodities. "A recent sell-off in equity markets seems cyclical in nature so we'll be advising clients to remain vigilant while our strategists determine the most appropriate time to rotate into high-quality assets that may have seen short-term declines in valuation," said Decker.
Implications for investors
The research note said that any rate cut could present new investment opportunities, particularly in interest rate-sensitive sectors such as real estate and financials, while also influencing bond yields.
Derwent Investments will continue to monitor economic conditions and Federal Reserve communications closely. The firm is committed to providing clients with timely insights and strategic advice to navigate the evolving investment landscape.
About Derwent Investments:
Derwent Investments is a leading investment management firm committed to delivering superior investment results and client service that is second to none. With a team of experienced professionals and a disciplined, research-led approach to investing, the firm provides innovative solutions and opportunities for medium-to-long-term capital growth. Derwent Investments' focus on research-driven investment strategies ensures that clients benefit from the latest market insights and technological advancements.
For further details on Derwent Investments and its suite of financial services, please visit:www.derwentinv.com
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Organization: Derwent Investments Pte Ltd
Website: www.derwentinv.com
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SOURCE: Derwent Investments Pte Ltd