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Nomura FOMC Review: Incoming Data Could Accelerate Hawks’ Taper Talk

FED

The April meeting did not change Nomura's outlook for the monetary policy trajectory, but they note that FOMC members' commentary after this meeting could be interesting, given what could be very strong inflation and employment reports, which risk "accelerating the timing of tapering-related communication… strong data could encourage hawkish participants to begin more publicly debating their preference for tapering".

  • Future action: Nomura sees rate liftoff in Q3 2023. They look for tapering discussions "to accelerate around June, an announcement in December and tapering to take place in January 2022". Nomura also sees a technical adjustment to IOER before August.

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