Nomura Forecasts Federal Reserve's Rate Policy Pivot

Nomura predicts a rate cut by the U.S. Federal Reserve at the upcoming policy meeting. The brokerage expects a 25-basis-point cut, citing dovish signals from Fed officials. Global brokerages, including J.P. Morgan and Morgan Stanley, have also revised their expectations to anticipate rate reductions.

Nomura has forecasted that the U.S. Federal Reserve is likely to implement an interest rate cut during this week's policy meeting. Joining international counterparts, the Japanese brokerage anticipates a 25-basis-point reduction, marking a shift from earlier expectations of maintained rates amidst dovish signals from Fed officials.

The adjustment in predictions comes after comments from key Fed figures, such as New York Fed President John Williams and San Francisco Fed President Mary Daly. Their dovish remarks have nudged the likelihood of a December cut, as Nomura strategists highlighted in a recent note.

Furthermore, the call for a December decision remains uncertain, with potential hawkish and dovish dissents anticipated. The outlook for 2026 includes further cuts, alongside expectations of a possible change in Fed chair, potentially impacting future rate policies.

(With inputs from agencies.)