Nomura Securities believes that the Federal Reserve's June interest rate meeting is a key turning point for the credit cycle and the end of the AI boom. Naka Matsuzawa, Chief Macro Strategist at Nomura, pointed out that the market overestimated the urgency of the Federal Reserve raising interest rates this year and underestimated the depth and persistence of the long-term interest rate hike path. Nomura Securities expects the Federal Reserve to remain inactive throughout 2026, and the market's pricing of approximately 1.5 interest rate hikes is expected to be revised. Naka Matsuzawa emphasized that the real risk lies in the preventive steps evolving into a complete and sustained cycle of substantial tightening.
AI interpretation: This interest rate meeting has clarified the policy tone of the Federal Reserve maintaining long-term high interest rates, completely breaking the market's illusion of a short-term shift towards easing. Nomura Securities' viewpoint reveals the fragility of the credit cycle and technology boom, indicating that tightening liquidity will have a substantial impact on asset valuations. The Federal Reserve combats inflation stickiness by extending its tightening cycle, which directly leads to a shift in market pricing logic from expectations of interest rate cuts to deep concerns about economic recession. The certainty of this policy path will force capital to reassess risk premiums and accelerate the deleveraging process of high valuation sectors in the market.
