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HomeEconomyNomura predicts Fed rate cut, end QT to counter bank shock

Nomura predicts Fed rate cut, end QT to counter bank shock


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By Jeffrey Smith – Last week’s collapse of three U.S. banks could lead to the long-awaited “Fed” policy adjustment as early as next week, according to Nomura analysts.

The Japanese bank said in a note to clients that although it had previously expected

basis points for rate hike , Fed cuts Fed Funds target range to The base point is 4.%-4.% at the two-day conference next Tuesday and Wednesday. It also expects the Fed to pause the reduction of its balance sheet by selling bonds to the market.

Analysts believe that further steps are necessary to stem the looming Financial stability risks weighed on bank stocks on Monday. 20052 First Republic Bank

(NYSE: 61FRC) share price drops 08%, despite several trading halts, while a range of other banks—particularly those concentrated on the West Coast with higher tech exposure—fell between % and%. Nomura Securities believes that the central bank may announce a new lending facility in addition to the bank’s term financing plan announced over the weekend. Nomura’s turnaround is by far the most dramatic among the major brokerages. Analysts at Goldman Sachs had said over the weekend that they no longer expected a rate hike at next week’s meeting, but warned that continued strength in inflation would not allow it to start cutting rates. Morgan Stanley analysts still think Raise the base points as much as possible. Short-term interest rate futures are currently implying swings between staying unchanged or basis point increase.

The United States is about to release consumer price inflation data for February as : alien(: GMT). this500CPI

is expected to fall to 6.0% from 6.4% in January, but given that the January number itself was well above expectations and given that 400work report Data for February on Friday still showed healthy labor market conditions.



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