Nomura are expecting a March Fed rate cut then a US inflationary shock due to tariffs

A brief summary of a note from Nomura re their outlook for Federal Reserve monetary policy:

• foresee a single 25 basis point rate cut occurring in March 2025, after which the Federal Reserve is likely to hold rates steady for an extended period due to inflationary pressures stemming from tariffs.
• In the early stages of a potential second Trump administration, economic policy discussions will primarily centre around tariffs and tax regulations.
• By mid-2025, inflation driven by tariffs is expected to prompt the Federal Reserve to halt its rate-cutting cycle for an extended duration.
• The job market is showing signs of slowing, with risks tilted toward further weakening. However, a gradual decline is more probable than a sudden downturn.

This article was written by Eamonn Sheridan at www.forexlive.com.