Richard Harris sees December Fed cut, no Russia-Ukraine truce, and no BOJ move this year

Richard Harris, Executive Director at Port Shelter Investment Management, weighed in on several key global macroeconomic shifts—from the market’s expectations around a US Federal Reserve rate cut to the prospects of a Russia-Ukraine peace deal and the policy stance of the Bank of Japan.On the Fed, Harris aligned with the widespread view that a 25-basis-point rate cut in December is likely. He stated that the bias toward lower rates has been evident for much of the year and explained the central bank’s approach, saying the Fed has taken the view that “while the economy is strong, we’ll keep rates high. When the economy starts to weaken, we’ll bring them back.”

Although the US economy has historically remained resilient—supported by strong employment, growth, and corporate earnings—Harris now sees signs of softening, especially in the labour market. With US rates still higher than most Western peers, he believes the Fed has the room it needs to begin easing.

Addressing geopolitics, Harris was deeply sceptical about the chances of a near-term peace agreement between Russia and Ukraine. He dismissed a previous 28-point plan as “dead on arrival” and cautioned that any fresh proposal is unlikely to succeed, especially with Moscow pushing back.Also Read: Fed unlikely to cut rates in December and AI excitement may cool, says Ed Yardeni

According to Harris, Russia is not under enough economic or strategic pressure to scale back its territorial ambitions, having adjusted to a prolonged war economy. While Western countries—particularly in Europe—may be eager for a resolution, he said he feels “the likelihood of some kind of truce is unlikely,” making a breakthrough improbable at this stage.

On Japan, Harris does not expect the Bank of Japan to shift policy before the year ends. He said, “I don’t think the Bank of Japan’s going to move… I think they’ll probably stay put,” suggesting the yen carry trade will remain intact. Harris also observed that the yen has held up surprisingly well despite the government’s push for higher spending, and he expects the currency to remain broadly stable in the near term.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here