Nomura: Fed Likely To Raise Rates by 75bps In June & July

The transcript discusses the Federal Reserve's monetary policy, focusing on rate hikes and their potential impact on the US economy. It highlights the risks of inflation and the need for a slowdown in GDP growth to manage labor market momentum. The discussion also covers forecasts for treasury yields and interest rates, with an emphasis on the potential for a recession. The analysis suggests a medium-term recession risk but notes that the current labor market remains strong.

What is the potential risk if the Federal Reserve does not slow down after the second 75 basis point hike?

• The stock market might crash.

• The economy might overheat.

• Inflation could decrease too quickly.

• There could be additional rate hikes.

What is the expected GDP growth rate for each quarter in 2023?

• Between 1% and 2%

• Exactly 2%

• Above 3%

• Below 1%

What does the Fed need to do to manage labor market momentum?

• Boost consumer spending

• Significantly slow down growth

• Increase employment rates

• Reduce interest rates

When is the 10-year yield expected to peak according to the forecast?

• Q3 of next year

• Q2 of next year

• Q1 of this year

• Q4 of this year

What is the estimated chance of a cumulative recession risk by the end of 2024?

• 35% to 45%

• 25% to 35%

• 10% to 20%

• 50% to 60%