The U.S. is barreling toward its first recession since the global financial crisis, with a downturn now “inevitable” in the first half of 2025, deVere Group CEO Nigel Green warned Thursday, citing a collision of faltering consumer spending, corporate retrenchment, and geopolitical shocks that threaten to destabilize global markets.
Green, whose firm oversees $12 billion in assets, argued that former President Donald Trump’s “erratic” tariff policies—including threats of 200% levies on European goods and impending April 2 duties on Canada and Mexico—have already corroded business confidence. “The damage is done. Global trade is rewiring itself around a U.S. that’s no longer seen as a reliable anchor,” he said, noting that combined with stubborn inflation and the Federal Reserve’s restrictive 4.25%–4.50% rate regime, the economy is “running out of guardrails.”
Retail sales data signals households are retreating, prioritizing essentials over discretionary purchases as savings buffers thin. Corporate earnings, meanwhile, reveal margin compression, with firms like Walmart and Target flagging softer demand. “The consumer engine is sputtering, and businesses aren’t waiting for a crash to hit the brakes,” Green added, pointing to hiring freezes in tech and financial services sectors, where Meta and Citigroup recently announced job cuts.
The labor market’s apparent resilience—unemployment remains at 3.7%—masks fragility, Green cautioned. “Job gains are concentrated in low-wage sectors, and full-time roles are being replaced by gig work. This isn’t strength; it’s stagnation.”
While inflation cooled to 4.1% year-over-year in January, down from December’s 4.8%, and the PMI climbed to 53.7 in February, Green dismissed these as “lagging positives.” Mortgage rates stuck near 6.65% continue to stifle housing activity, with existing home sales at a 15-year low. “The Fed’s tools are blunt now. Even if they cut rates mid-year, recessionary momentum will be hard to reverse,” he said.
Global ramifications loom large. Europe, already teetering near recession, faces export demand collapse, while emerging markets like Nigeria and Argentina—grappling with dollar-denominated debt—risk currency crises as capital flees to safety. “Investors are underpricing EM contagion,” Green noted, adding that private equity giants like Blackstone have paused acquisitions, wary of sinking valuations.
Equity markets reflect the anxiety. The S&P 500 and Nasdaq have slid 12% and 15% from January peaks, respectively, with tech stocks bearing the brunt. Yet Green sees pockets of opportunity: “Defensive sectors—utilities, healthcare, consumer staples—will outperform. Gold’s push toward $3,000/oz isn’t done, and Treasury bonds will rally as flight-to-quality kicks in.”
He urged investors to pivot from cash, which remains vulnerable to lingering inflation, and instead diversify into high-quality global equities and structured credit. “Panic creates bargains. Those with liquidity can grab discounted assets—but timing is everything.”
The critical unknown, Green stressed, is depth and duration. “If the Fed hesitates, this becomes a multi-year slog. If they overcut, inflation reignites. There’s no smooth path.”
As Wall Street braces, Main Street’s reckoning may hinge on Washington’s next move. For now, the countdown to contraction has begun.
