diff --git a/agent/conversation_loop.py b/agent/conversation_loop.py
index 8850b7fd565..bcd84a373bb 100644
--- a/agent/conversation_loop.py
+++ b/agent/conversation_loop.py
@@ -2631,10 +2631,13 @@ def run_conversation(
                     except Exception:
                         pass
                     if _genuine_nous_rate_limit:
-                        # Skip straight to max_retries -- the
-                        # top-of-loop guard will handle fallback or
-                        # bail cleanly.
-                        retry_count = max_retries
+                        # Re-enter the loop exactly once so the
+                        # top-of-loop Nous guard handles fallback or
+                        # bails cleanly. (Setting retry_count to
+                        # max_retries would make the while condition
+                        # false immediately and the guard would never
+                        # run -- no fallback, generic exhaustion error.)
+                        retry_count = max(0, max_retries - 1)
                         continue
                     # Upstream capacity 429: fall through to normal
                     # retry logic.  A different model (or the same