The Federal Reserve will cut its benchmark interest rate by a quarter percentage-point and stop reducing the size of its balance sheet at its upcoming policy meeting next week, according to economists at Nomura Securities.
“In reaction to looming financial stability risks, we now expect the Fed to cut rates,” Nomura economists Aichi Amemiya and Jacob Meyer wrote Monday in a note. “We also expect the Fed to stop quantitative tightening,” they added, noting that “ending QT should help keep the amount of reserves more ample than they would be otherwise.”
