Commentary from Nomura, a bit of a big picture view. Analysts at the bank are circumspect on what monetary policy can do.
Nomura argue that, looking ahead, higher levels of inflation seem inevitable, partly due to inflated asset prices and the limits of efficiency driven by globalization. If, they add, we shift to a more isolated economy with higher costs tied to reshoring, there’s only so much that interest rate policies can achieve. For almost 15 years, globalization, favorable trade policies, and supportive measures have kept the economic environment stable. Now, as we transition away from those supportive conditions and see the decline of globalization and a shift toward reshoring and more inward-focused policies, we are entering a more challenging economic landscape.
I've seen separate analysis from Nomura forecasting a 25bp rate cut from the Federal Reserve at both the November and December meetings, so it appears the time for concern over higher inflation is ... not yet.
