Mark Veldon, UK Country Co-Leader and Co-Leader of EMEA Private Equity at AlixPartners, comments on the US Federal Reserve Interest Rate decision:

“With a 0.25% rate cut yesterday, the Fed has taken another step to ease monetary policy. As the second reduction this cycle, the move shows a clear recognition that inflationary pressures have started to ease, and the jobs market is beginning to soften somewhat. Yesterday’s decision also lowers the federal funds rate target to 4.5-4.75%, aligning with the Fed’s careful approach to balance inflation control whilst supporting growth – a delicate equilibrium to achieve. These lower rates could accelerate borrowing and investment activity, which will be a welcome shift for sectors that have been grappling with tight credit conditions over the past year.
 
“For investors, a rate reduction brings exciting opportunities—particularly in debt-financed investments and growth-focused sectors like technology and manufacturing. However, this doesn’t mean that investors should gear up to go all-in. It's important to take a holistic view: core inflation remains elevated, and geopolitical risks and supply chain disruptions are still complicating forecasts. Many factors are at play here and patience is key; even with cheaper borrowing, investors must stay mindful of the broader market complexities that aren’t solved by rate cuts alone.
 
“The latest decision could provide a boost for private equity and other capital-intensive investments, potentially sparking a stronger deal flow across the U.S. But caution is still warranted. As the Fed works to stimulate growth without rekindling inflation, maintaining disciplined, long-term resilience over quick wins will be essential.”