Nomura Predicts Federal Reserve Action on Interest Rates

03/14/2023 03:36 • NFT Newsflash • 133 views

On March 14, Nomura predicted that the Federal Reserve would cut interest rates by 25 basis points in March and suspend quantitative tightening. (Cailian Press)

Nomura expects the Federal Reserve to cut interest rates by 25 basis points in March and suspend quantitative tightening

Analysis based on this information:

Nomura Securities, a well-known global investment bank, reported on March 14th that the Federal Reserve would reduce interest rates by 25 basis points by the end of March. The Japanese bank also predicted that the US central bank would suspend quantitative tightening, a strategy that reduces the money supply and increases policy rate.

Nomura Securities cited the US central bank’s outlook on the nation’s economy, indicating that concerns are growing over the economy’s capacity to sustain growth under current conditions. The bank also noted that recent economic data, including the increase in the unemployment rate, raises further concerns over reduced spending and economic activity.

The prediction of Nomura Securities comes on the heels of the Federal Reserve’s decision in January 2019 to leave the interest rates unchanged. The decision was made due to a decline in consumer spending, wage growth concerns, and increased uncertainty over US-China trade relations, among other factors.

The current trend towards reduced interest rates represents a shift in policy from previous years, where the Federal Reserve consistently increased the interest rate to curb inflation. However, with inflation remaining below the Federal Reserve’s 2% target, along with the rising concerns over economic growth, the central bank is being pushed to revise its stance on policy rates.

Nomura’s outlook is not unique, as other market analysts have predicted an upcoming decrease in interest rates over the next few months. The Bank of America Merrill Lynch also predicts that the Federal Reserve will announce a rate cut in June 2019 following the Federal Open Market Committee meeting (FOMC).

In conclusion, Nomura Securities’ prediction of a possible interest rate cut and halting of quantitative tightening shows a growing concern over the health and sustainability of the United States’ economy. The lack of growth in the economy, coupled with the rise in unemployment rate and reduced consumer spending, is causing the central bank to revise its policy stance. Other analysts have also shown similar predictions, highlighting the significance of a possible shift in the Federal Reserve’s stance on policy rates.

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Nomura Predicts Federal Reserve Action on Interest Rates

Nomura expects the Federal Reserve to cut interest rates by 25 basis points in March and suspend quantitative tightening

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