(Reuters) -Nomura expects the U.S. Federal Reserve to cut interest rates by 25 basis points in September, bringing forward its easing forecast, amid signs of milder U.S. inflation in July and early cracks in the labor market.

The Consumer Price Index rose 0.2% last month, easing from a 0.3% gain in June and broadly in line with economists’ expectations, while annual inflation came in slightly below forecasts, according to data released on Tuesday.

The brokerage expects two more 25-bp reductions, in December 2025 and March next year, but said a 50-bp cut next month is unlikely as “The labor market is slowing, but there are few signs of stress, and broader financial conditions remain easy.”

The brokerage also lowered its core Personal Consumption Expenditures (PCE) estimate to 0.243% for

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