Nomura’s latest outlook, released Tuesday, lifts its projection of Fed rate hikes to seven by the end of 2026, a jump of two from the five hikes it flagged in Q2.
Oil prices are perched at $82 a barrel and core inflation remains stubbornly at 4.3%, according to the firm’s senior economist Tetsuya Tanaka. These factors give Nomura a rationale to expect a more hawkish Fed than the market’s 4.5‑hike consensus.
Tanaka added that the persistent commodity price pressure will keep real yields elevated, potentially tightening the bond market. Bond spreads are currently about 120 basis points above U.S. Treasuries.
JP Morgan analysts project Nomura’s earnings to rise 12% YoY, but the higher forecast could dampen investor sentiment on the firm's bond‑trading desk. The bank’s shares slipped 1.5% after the announcement.
Nomura will report Q3 earnings on May 15, where it is expected to beat estimates by 8%. The firm’s guidance will further inform market expectations on the trajectory of U.S. monetary policy.