Nomura: Trump's Victory Will Further Heighten Policy Divergence Between the Fed and ECB

Nomura analysts suggested that Republican Donald Trump's presidential victory would further increase the existing policy divergence between the Fed and the ECB. Trump declared his victory as results indicated a return to the White House. Analysts noted, "We see the risk that the Fed may halt the easing cycle during Trump's term if inflation rises." They also pointed out that the ECB might need to take stronger actions due to negative growth effects. However, Nomura analysts emphasized that the ECB is very cautious and it's unlikely to cut interest rates preemptively, thus they do not expect a 50 basis point reduction in December as long as data aligns with expectations.