Nomura Forecasts Two RBI Rate Hikes and a December Fed Increase as Inflation Persists

Nomura's Robert Subbaraman expects two RBI rate hikes and an additional December Federal Reserve rate increase, citing persistent global inflation and the AI-driven investment boom as factors keeping central banks in tightening mode beyond the September decision, according to CNBC TV18. This outlook is more hawkish than consensus, implying that investors who have priced in a Fed pause after September may face repricing risk if inflation data supports Nomura's more aggressive trajectory.

For Indian equity markets, two additional RBI rate hikes would represent a significant tightening of domestic financial conditions beyond what is currently priced. Rate-sensitive sectors including banking (through NIM compression risk), real estate, and consumer discretionary would face valuation headwinds. Nomura's AI investment boom thesis is paradoxically bullish for Indian IT services companies but bearish for rate-sensitive domestic consumption.

Watch the Nomura forecast against incoming Indian and global inflation data for calibration — specifically the September US CPI print and India's August WPI/CPI releases. The decisive variable is core services inflation in both economies: if it continues to prove sticky above central bank targets, Nomura's two-additional-hike scenario becomes consensus and the repricing across interest rate-sensitive assets would be meaningful.

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