Nomura: Markets Pricing Excessive Rate Hikes
Business Standard · stocks
Analysts at Nomura believe markets are pricing in an excessive 125 basis point rate hike cycle over the next year. They assign an 80% probability to a limited 'recalibration' cycle of 25-50 bps, citing limited signs of broad-based inflation. While food prices pose a near-term risk, core inflation has seen significant moderation. Nomura expects headline CPI to rise to 6.3% in Q4 before easing, with further rate hikes becoming less likely post-February 2027 due to potential consumption slowdown.