Nomura flags Asia policy split as Fed seen cutting twice in 2026

Nomura's recent report highlights a clear division in Asian monetary policy as the easing cycle is deemed largely complete. Despite low inflation, improving growth dynamics and neutral policy rates have led central banks to adopt a more cautious approach, limiting potential rate cuts due to rising housing prices. In contrast to the U.S., where two Federal Reserve rate cuts are anticipated in 2026, Nomura suggests Asia may increasingly diverge from the U.S. hawkish stance. The report identifies South Korea, New Zealand, Australia, and Malaysia as likely to hold or raise rates, while other economies like India and China are expected to maintain an easing bias. Overall, global growth and demand from China present upside risks, with concerns over U.S. demand weakness and trade tensions posing threats to the outlook.