Nomura forecasts no Fed rate cuts in 2026 as inflation rises

Nomura expects the U.S. Federal Reserve to leave interest rates unchanged in 2026, as higher inflation and waning support among Fed officials for policy easing diminish the chances of a near-term rate reduction.

"Incoming Fed Chair Kevin Warsh is likely still motivated to ease policy, but recent data and Fedspeak make us skeptical that he will be able to convince a majority of the FOMC to go along with rate cuts," Nomura said in a note dated May 21.

The brokerage had earlier projected two 25-basis-point interest rate cuts in September and December this year.

(Reporting by Kanishka Ajmera in Bengaluru; Editing by Harikrishnan Nair)

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This story was originally published May 21, 2026 at 9:06 PM.