Donald Trump’s sweeping new global tariff plan, set to be unveiled on Wednesday, is expected to prompt at least three interest rate cuts this year from both the US Federal Reserve and the European Central Bank.
This is the prediction from Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations, as Washington’s policy shift weighs heavily on global growth and investor confidence.
Dubbed “Liberation Day” by the White House, the new wave of tariffs marks a major escalation in Trump’s protectionist agenda. Rather than targeting a select group of nations with the largest trade imbalances, this move will hit almost all major trading partners.
“You’d start with all countries,” the president said aboard Air Force One—abandoning the idea of a narrow rollout and confirming the global scope of what’s to come.
Nigel Green: “Markets are already reacting. US equity futures are lower, European stocks have dropped, gold is at record highs, and Treasury yields are falling. Risk aversion is spreading as investors digest the scale of disruption a globally applied tariff regime could bring.
“This isn’t a diplomatic bluff—it’s a policy reality, and central banks are likely to be preparing to respond.
“The Fed, which had previously signalled caution, will be forced to ease more aggressively. Our new baseline is at least three rate cuts this year. The rationale isn’t to chase inflation or stoke demand—it’s to counter the tightening effect of tariffs on growth, investment, and sentiment.
“Companies are already holding back. Capital spending is slowing. Hiring plans are being revised. The Fed’s role now is to cushion an increasingly policy-induced downturn.”
He continues: “The ECB faces the same dilemma, with fewer options. Europe’s economy is more exposed to trade, and its industrial core—particularly in Germany—is highly vulnerable to barriers on exports.
“A broad US tariff regime will further erode Europe’s already weak growth outlook, forcing the ECB to deliver a faster and deeper round of rate cuts than previously expected. Any delay risks a more serious deterioration in confidence across the eurozone.”
For investors, this shift has real implications.
First, the idea that rate cuts will automatically lift risk assets is too simplistic. “These cuts are defensive. They are coming not because growth is resilient, but because it’s being undermined. Equity rallies in the face of monetary easing should not be taken for granted—especially in sectors directly tied to global trade.”
Second, there’s renewed urgency around portfolio diversification. “Assets that perform well in uncertain or decelerating environments—longer-dated sovereign bonds, quality dividend stocks, infrastructure, and gold—should be gaining weight in allocations. Exposure to export-heavy cyclical sectors, particularly in Europe and Asia, now carries increased downside.”
Third, investors should reassess currency positions. “With the Fed and ECB both heading into more dovish territory, the relative appeal of the US dollar may erode, particularly against traditional safe-haven currencies like the Swiss franc and Japanese yen.
“Meanwhile, EM currencies exposed to trade flows face heightened risk, especially those tied to commodities or vulnerable to capital flight.”
And fourth, volatility appears no longer episodic—it’s structural. “The return of tariffs as a central pillar of US policy means geopolitical risk is now embedded in the economic outlook. Investors need to adapt.”
The deVere Group CEO concludes: “Trump may believe this reset is necessary to rebalance trade.
“But for global markets, the outcome is slower growth, more central bank intervention, and the end of predictability in cross-border commerce.
“Rate cuts will help—but they won’t fully offset the damage. Investors should prepare not for stimulus-driven surges, but for a more defensive, risk-aware investment landscape ahead.”
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $14bn under advisement.
