Fed to Maintain Higher Interest Rates Despite US Job Growth Slowing to 143,000, Says deVere Group CEO

“Fed Chair Jerome Powell has made it clear—the Federal Reserve is committed to keeping rates higher for longer,” Green says. “The central bank will not rush into rate cuts.”

The US economy added just 143,000 jobs in January, a sharp decline from December’s 256,000. The slowdown in hiring is attributed to disruptions caused by wildfires in California and severe winter weather.

Despite this dip in job creation, Nigel Green, CEO of deVere Group, warns that markets are misjudging the Federal Reserves next steps. He cautions that investors betting on a quick rate cut will face a harsh reality.

Although job growth has slowed, wage inflation continues to be a pressing issue. Average hourly earnings rose 3.8% year-over-year in January, showing only a slight dip from 3.9% in December.

The unemployment rate held steady at 4.1%, underscoring the resilience of the labor market despite recent disruptions. “This jobs report doesn’t give the Fed a reason to pivot,” says Green. “The slowdown is weather-related, not a sign of deep economic weakness. Wage pressures are still strong, and inflation is far from beaten.”

At its January meeting, the Federal Reserve kept rates at 4.25%-4.50% but struck a more hawkish tone, removing language that previously suggested inflation had made “progress.” Instead, the central bank warned that price pressures “remain elevated.”

Despite these clear signals, markets continue to price in 46.3 basis points of rate cuts by December, with a quarter-point reduction fully expected by July, according to LSEG data. Green warns that this is a major miscalculation.

“Some investors are ignoring reality. The Fed has no reason to cut rates while inflation remains sticky. In fact, with Trump in the White House, we could see a new wave of inflationary pressures.”

Nigel Green argues that Trump’s likely economic policies—including aggressive fiscal spending, protectionist tariffs, and potential trade wars—could make inflation an even bigger issue.

“Trump is not a deflationary force—he’s an inflationary one. His proposed tax cuts, infrastructure spending, and tariffs could push prices higher, forcing the Fed to maintain a hawkish stance well into 2025,” he says.

The disconnect between market expectations and Fed policy presents opportunities—and risks.

“The biggest mistake investors can make right now is assuming rate cuts are just around the corner,” says Green. “They’re not, we don’t believe. The Fed’s priority remains inflation, and until we see real evidence of a sustained decline, Powell will keep rates higher for longer, we expect.”

He concludes: “The Fed isn’t budging, inflation isn’t disappearing, and markets are miscalculating the risks ahead.”