Nomura US Economic Weekly
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Nomura's latest US Economic Weekly highlights easing Middle East tensions following Iran's reopening of the Strait of Hormuz and a ceasefire between Israel and Lebanon, although uncertainties remain. Federal Reserve Chair nominee Kevin Warsh is scheduled for a Senate Banking Committee hearing on April 21. Nomura expects him to maintain a dovish medium-term stance, though near-term policy easing is unlikely given persistent inflation risks.
Stronger-than-expected March PPI data prompted Nomura to raise its March core PCE inflation forecast by 7 basis points to 0.259% month-over-month (3.153% YoY). The firm anticipates core inflation will remain firm in the coming months, facing upside risks from global shortages of critical materials, rising energy costs, and the upcoming World Cup.
Nomura now expects the Federal Reserve to implement rate cuts in September and December 2026, a delay compared to previous expectations. The Q1 GDP growth tracking estimate stands at 1.7% annualized quarter-over-quarter. March retail sales are projected to increase 1.1% month-over-month, driven primarily by gasoline and auto sales, while excluding these categories, growth is a mere 0.1%. Key upcoming data points include retail sales, Warsh's confirmation hearing, jobless claims, and PMI figures.