Nomura Securities: It is expected that the Federal Reserve will only cut interest rates twice more next year, and then pause rate cuts until March 2026

Nomura Securities no longer anticipates that the Federal Reserve will cut interest rates at its policy meeting in December. This makes it the first global securities firm to suggest a rate-cutting cycle for the Fed after Trump's election victory. Nomura now expects that the Fed will only cut rates twice more, by 25 basis points each time, at meetings in March and June 2025. The brokerage maintains its forecast for the federal funds rate before next year at 4.125%. After a possible rate cut in June next year, Nomura predicts that the Fed will pause cuts for a long period until March 2026.

The benchmark overnight interest rate of the Federal Reserve is currently between 4.50% - 4.75%, and has been reduced by 75 basis points so far this year. Meanwhile, other global brokerages including Goldman Sachs and JPMorgan still expect that the Fed will cut rates by another 25 basis points next month.