Elevated oil prices and sticky inflation have prompted the Japanese investment bank Nomura to increase its Federal Reserve interest-rate hike forecasts. The bank now expects the Fed to hike rates this week and in December, followed by an extended hold through 2027. Nomura also revised upward its forecasts for the European Central Bank, anticipating two additional hikes in December and March. The bank projects inflation could remain above target until early 2027, citing the Iran conflict. The CNBC Fed Survey shows a majority of economists now forecast at least two rate hikes over the next year, up from less than half last month.
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