Nomura pivots away from 2026 Fed rate cut forecasts
Nomura expects the Fed to hold rates steady in 2026 as inflation risks persist. Analysts doubt incoming Chair Kevin Warsh can secure a majority for cuts.
NOMURA HOLDINGS INC scrapped its forecast for 2026 interest rate cuts, expecting the Federal Reserve to hold rates steady due to persistent inflation. The brokerage previously projected 25-basis-point cuts in both September and December. This shift aligns Nomura with a growing cohort of financial institutions preparing for a higher-for-longer rate environment in the United States.
### Inflation Risks From Conflict and Scarcity Nomura analysts said in a May 21 note that rising price pressures from the war in Iran are spilling over into consumer prices. A widening global memory chip shortage is further elevating these costs. These supply-side shocks have forced a reversal of earlier dovish expectations.
