(Bloomberg) -- The Federal Reserve will cut its benchmark interest rate by a quarter percentage-point and stop reducing the size of its balance sheet at its upcoming policy meeting next week, according to economists at Nomura Securities.

“In reaction to looming financial stability risks, we now expect the Fed to cut rates,” Nomura economists Aichi Amemiya and Jacob Meyer wrote Monday in a note. “We also expect the Fed to stop quantitative tightening,” they added, noting that “ending QT should help keep the amount of reserves more ample than they would be otherwise.”

The Fed, in concert with other regulators, rolled out measures over the weekend including a backstop for bank deposits to shore up confidence in the banking system after the collapse of Silicon Valley Bank on Friday.

“However, judging by the market’s reaction, financial markets seem to view these policy actions as insufficient, as stock prices for the US financial sector continue to decline as of this writing,” Amemiya and Meyer said.

“It is possible the Fed may create a new lending facility by either offering a wider eligibility of collateral assets or broader access for borrowers through an emergency lending facility,” they said.

Earlier Monday, economists at Barclays Plc joined Goldman Sachs Group Inc. and Natwest Markets in calling for a pause to the Fed’s monetary tightening campaign at the March meeting.

Overnight index swaps are now priced for 12 basis points of tightening at the meeting, indicating roughly even odds of a quarter-point rate hike.

(Updates with additional details beginning in second paragraph.)

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