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Nomura Confirms Interest Rate Hike Forecast, May Increase In September And November

Analysts at Nomura Holdings Inc. have firmed up their forecast of a further increase in interest rates towards the Federal Reserve by the end of the year. According to media reports, Nomura economists led by Aichi Amemiya released a report on Friday, according to which the Federal Reserve may increase the benchmark rate by 0.75 percent in the meeting of September and November. This estimate is 0.25 percent higher than Nomura’s previous forecast.

The report said that the comments of Fed experts suggest that the US Fed may increase its policy rates sharply to deal with inflation running above the tolerance level. According to the report, US Fed officials are concerned about the increase in the short-term nominal neutral rate due to rising inflation. At what level the ever-increasing inflation will settle, experts are keeping an eye on it.

According to the report, there is still a lot of softness in the market. The bond market is feeling that the US Fed will tighten further to deal with inflation and interest rates will definitely increase.

According to analysts at Nomura, the earlier estimate of a 0.25% increase in interest rates in the months of December and February remains the same. The 4% interest rate was earlier projected to rise to 4.25%. Gold Man Sachs Group Inc had also predicted a hike in interest rates this week.

What is Nomura? What does it do?

Nomura Holdings is a Japanese financial holding company and a major member of the Nomura Group. Together with its broker-dealer, banking and other financial services subsidiaries, it provides investment, financing and related services to individual, institutional and government clients on a global basis. These services typically focus on securities businesses.

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