Nomura Predicts Steady Fed: No December Rate Cuts Expected

Nomura, a Japanese brokerage firm, announced it anticipates the U.S. Federal Reserve keeping interest rates constant during its December meeting, following a recent rate cut. This marks a shift from Nomura's earlier expectation of a 25-basis point reduction in December.

The Federal Reserve has lowered interest rates by a quarter percentage point as a preemptive measure against further job market deterioration. "Upcoming data might be modestly dovish; however, we doubt it will be significant enough to reignite concerns over the labor market's state," stated Nomura in a Wednesday note.

Federal Reserve Chair Jerome Powell conveyed that internal policy disputes and a lack of comprehensive data pose challenges to additional rate cuts this year. While acknowledging labor market risks, Powell underscored the danger of acting without a complete economic perspective. Nomura forecasts three 25-basis point cuts in March, June, and September in 2026.