According to APP, Nomura Securities has postponed its expectations for a Federal Reserve rate cut to September and December, citing renewed inflation risks stemming from the Middle East conflict. Nomura's chief U.S. economist, Jeremy Schwartz, also noted that the delay in the confirmation process for Fed Chair nominee Kevin Warsh is another reason for revising his rate cut timeline from the previously predicted June and September. While price pressures are considered temporary, the Fed is likely to remain cautious in the short term. Nevertheless, policymakers maintain an accommodative stance, and Nomura expects the new Fed chair to prioritize significant policy easing. He stated, "Federal Open Market Committee officials maintain an accommodative stance and have shown an asymmetric response to any signs of weakening labor markets."

This adjustment in expectations highlights the direct impact of geopolitical factors on the path of monetary policy. The Middle East conflict has driven up energy and commodity prices, potentially exacerbating imported inflation in the short term and forcing the Federal Reserve to pause its easing efforts until data becomes clearer. Meanwhile, the delay in Kevin Warsh's appointment process has increased policy uncertainty, with the market awaiting signals from the new leadership. Jeremy Schwartz 's analysis emphasizes that although inflationary pressures are temporary, policymakers tend to adopt a cautious approach to avoid premature easing that could trigger a double-dip inflation risk. However, the "asymmetric reaction" of Federal Open Market Committee officials to the weakening labor market suggests that easing measures will be implemented quickly once employment data shows a clear slowdown, leaving considerable room for subsequent interest rate cuts.

From a macroeconomic perspective, this delayed expectation reflects the continuation of the Federal Reserve's data-dependent decision-making framework. In the current environment, energy price volatility and supply chain disruptions together pose upside risks to inflation, and short-term caution helps stabilize market expectations. The new chairman's dovish stance suggests that once geopolitical risks ease or economic data weakens, the policy shift may be faster than the market is currently pricing in. Investors should focus on subsequent employment, CPI, and statements from Federal Reserve officials, as these factors will directly determine the actual pace and magnitude of interest rate cuts.

The following is Nomura Securities ' latest comparison of the Federal Reserve's interest rate cut timeline:

Editor's Summary : Nomura Securities' latest forecast reveals the dual constraints on monetary policy expectations posed by the Middle East conflict and personnel changes at the Federal Reserve. A cautious short-term stance helps manage inflation risks, while the overall dovish preference of policymakers leaves room for further significant easing. Market participants need to continuously monitor geopolitical developments, employment data, and the new Fed Chair's policy orientation to dynamically assess the probability of interest rate cuts and their impact on financial asset pricing.