The Japanese brokerage had previously expected a 25-basis point (bp) interest rate cut in December.

The US central bank trimmed interest rates by a quarter of a percentage point, as expected, as a way to temper any further weakening of the job market.

“Data are likely to be modestly dovish in the months ahead, but we doubt the weakness will be sufficient to rekindle FOMC concerns of a deteriorating labour market”, Nomura said in a note late Wednesday.

Fed chair Jerome Powell said that internal policy disagreements and insufficient federal data could hinder further rate cuts this year, noting both the risks to the labour market and the dangers of acting without a clearer view of the economy.

Nomura expects three 25-bp cuts in March, June, and September in 2026.