The Effective Federal Funds Rate is the volume-weighted median rate at which U.S. banks lend reserves to each other overnight. It is the U.S. Federal Reserve's primary policy rate: the Fed sets a target range, and the EFFR reflects where the market actually trades, steering all other U.S. rates.
Hot inflation data and weak jobs report flip October rate-hike odds from 70% to hold
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Below-forecast PCE inflation sharply cuts October hike odds August PCE inflation came in at 3.4% year-on-year, below the 3.7% expected, with core at 3.0% versus 3.3% forecast. That eased inflation worries and raised the chance the Fed holds rates steady in October to about 63% from 49% a day earlier, lowering expected EFFR.MM.
This is the first major data surprise that reversed the market's rate-hike expectations, directly pushing EFFR.MM lower.
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Weak September jobs report makes an October hold very likely September nonfarm payrolls rose only 29,000, far below the 89,000 expected, and unemployment rose to 4.2%. Investors now price an 83.9% chance the Fed holds rates at 3.75–4.00% in October, up from 35.8% a week ago, pulling expected EFFR.MM down.
This is the latest and most decisive data point that slashed near-term rate-hike expectations, a direct negative for EFFR.MM.
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Oil above $100 and Middle East conflict keep inflation risk alive Brent crude topped $108 after the US rejected Iran's peace proposal, and the Strait of Hormuz remains largely closed. Higher oil prices feed inflation, which could force the Fed to hike later, keeping upward pressure on EFFR.MM even as near-term odds fell.
This is the main counterweight: it explains why EFFR.MM doesn't just collapse despite weak jobs and soft PCE.
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Fed officials still talk tough on inflation, but data now rules Governors Cook and Barr and regional presidents Williams and Logan said inflation is still too high and more hikes may be needed, with Williams seeing one more late this year. That keeps a floor under EFFR.MM, though markets now bet the Fed will wait.
It shows the policy bias remains hawkish, a positive force for EFFR.MM that balances the negative data surprises.
Q3 2026
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Fed hikes once, but weak data and political pressure cap further increases
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First Fed rate hike since 2023 The Fed raised its benchmark rate to 3.75–4.00%, the first increase since 2023, citing strong jobs, sticky inflation, and oil above $100. It signaled one more hike could come.
This was the main event that directly raised the effective federal funds rate during the quarter.
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Weak data and political pressure flip October odds to hold After the hike, below-forecast inflation, a weak September jobs report, a Fed official's dissent, and Trump's pressure for cuts flipped October hike odds from 70% to about 84% for a hold, capping expected rates.
This shows the counterweight that prevented further rate increases and pushed expectations down.
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Rate-hike odds swung on mixed data and Fed signals Early in the quarter, weak July payrolls and soft retail sales cut September hike odds to ~29%, but hawkish Fed minutes and Warsh's Jackson Hole speech revived them to 55–60%, keeping the path unclear.
This explains the back-and-forth in expectations that set the stage for the eventual hike.
News & notes movingEFFR.MM
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US September Jobs Report: Payrolls Slow Sharply to 29,000 Gain, Unemployment Rate Worsens to 4.2%
In the September US employment report released on the 2nd, the increase in nonfarm payrolls came in at 29,000 from the previous month, far below the expected 90,000 gain, and the unemployment rate also worsened to 4.2%, its first deterioration in seven months. However, the rise in the unemployment rate is seen as driven by an increase in people willing to work, and the average pace of gains over the past three months has held at about 50,000, so the dominant view is that the employment situation remains on a stable footing. Combined with the weak content and remarks by Fed Vice Chair Jefferson calling for cautious policy adjustment, expectations that the Fed will proceed with an additional rate hike at its meeting on the 27th and 28th of this month have receded, and the probability of a hike in the interest rate futures market has fallen from 70% at one point to 20% recently. Meanwhile, the surge in crude oil prices due to the US-Iran conflict pushed August inflation to 3.4%, far above the Fed's 2% target, and Cleveland Fed President Hammack stated plainly that "the concern is precisely inflation." In judging whether to raise rates further, the Fed plans to place weight on inflation indicators released going forward.
EFFR.MM · Monetary · Negative Weak September payrolls (29k vs 90k expected) and Fed Vice Chair Jefferson's cautious remarks cut rate-hike odds from 70% to 20%, pushing the expected fed funds rate lower.
US-10Y.GB · Monetary · Negative Receding Fed rate-hike expectations on the soft jobs report lower the 10-year Treasury yield, though the oil-driven 3.4% inflation print tempers the decline.
Orbix INVEST waives fees to 0% for OBX-BTC investments, capped at 1 million baht
Orbix Invest has launched a promotion waiving the entry fee for its orbix BTC Flagship strategy, or OBX-BTC, cutting it from the usual 0.4% to 0% for investments of at least 100,000 baht per transaction and no more than 1 million baht per person, from October 1 to 30, 2026. Dr. Thanapoom Damrak, Managing Director of Orbix Invest Co., Ltd., said the Bitcoin market has passed its bottom and entered a new upward cycle after continuous institutional inflows into spot Bitcoin ETFs. Spot Bitcoin ETFs in the United States drew net inflows of 3.52 billion dollars in August, the highest level of the year, while total net assets stood at more than 99 billion dollars, and the number of major asset managers holding the ETFs rose 150% over the year. Bitcoin most recently closed at 86,620 dollars, its highest level since January, and rose 25% in August, its best month since November 2024. Although prices have recovered, they remain about 32% below the all-time high of roughly 126,000 dollars. About 20.09 million bitcoins, or roughly 96% of the 21 million maximum supply, have already been mined and are in circulation. The US Federal Reserve raised its policy rate by 0.25% to a range of 3.75–4.00%, its first rate hike since 2023, yet Bitcoin still rose after the decision. Dr. Thanapoom advised investors to invest gradually and consistently through DCA to average costs and reduce the impact of volatility, and stressed that year-end price estimates from various financial institutions remain wide, ranging from 38,000 to 170,000 dollars.
Digital Finance & Tokenization › Digital Wealth & Robo-Advisory ▲Pricing
BTC · Demand · Positive Institutional inflows into spot Bitcoin ETFs (3.52B in August, highest of year) and rising asset-manager holdings signal strong demand supporting Bitcoin's upward cycle.
Orbix Invest · Pricing · Positive Orbix Invest waived its entry fee from 0.4% to 0% for OBX-BTC investments of 100,000-1 million baht from October 1-30, 2026.
EFFR.MM · Monetary · Positive The Fed raised its policy rate by 0.25% to 3.75-4.00%, its first hike since 2023, pushing the effective federal funds rate yield up.
US-10Y.GB · Monetary · Neutral Article mentions the Fed's rate hike but does not state the 10Y Treasury yield's direction; only the policy rate is discussed.
Cleveland Fed President Says There Is Still Time to Assess Data Before This Month's Rate Decision
Several U.S. central bank officials signaled this week that the Fed still has time to assess economic data before deciding on another interest rate hike. Cleveland Fed President Beth Hammack said the September U.S. employment report was consistent with recent hiring trends and that she still has time to consider the direction of monetary policy. Hammack said in an interview on PBS NewsHour that September employment rose by only 29,000 jobs, while the unemployment rate edged up to 4.2%, and over the past 12 months employment has risen by an average of 41,000 jobs per month, which is close to the level she estimates to be the breakeven point for the labor market, reflecting that the labor market appears to be stabilizing. She said the Fed will receive much more data before its meeting late this month, so there is still time to decide what the appropriate course of monetary policy should be so that the Fed can achieve both sides of its mandate: maintaining price stability and promoting maximum employment. Hammack is one of the Fed officials who has consistently supported raising interest rates to control inflationary pressures that she and other Fed officials view as still elevated. Last month, the Fed raised its target interest rate range by 0.25% to 3.75%-4%, with Fed officials expecting another rate hike before the end of the year. However, comments from Fed officials this week indicate that the Fed is likely to hold off on rate action at the Federal Open Market Committee meeting scheduled for Oct. 27-28.
EFFR.MM · Monetary · Negative Fed officials signal they can wait before hiking again, implying the policy rate is likely to stay put at the Oct. 27-28 meeting rather than rise.
US-10Y.GB · Monetary · Negative Expectations that the Fed will hold off on another rate hike at this month's meeting push the 10-year Treasury yield lower.
Chicago Fed President Says Both Rate Hike and Hold Are Options, Flags Inflation Response as Priority
Chicago Fed President Austan Goolsbee said on the 2nd that the September employment report showed the labor market is stable, and that addressing inflation has become an important task for the Federal Reserve. Asked on the Fox Business Network program "The Big Money" whether the Fed should decide to raise rates again at this month's meeting or hold off, Goolsbee said both a hike and a hold "still have plenty of room for consideration," adding, "I want to see whether the evidence comes together showing that inflation is once again falling toward our 2 percent target." At its FOMC meeting held September 15-16, the Fed decided on a 0.25 percentage point rate hike, the first increase in three years and two months since July 2023, and the decision was unanimous. Expectations that another rate hike will be decided at the next FOMC meeting on October 27-28 are receding. Goolsbee does not have a vote on this year's FOMC.
EFFR.MM · Monetary · Neutral Goolsbee says both a hike and a hold remain options and wants evidence inflation is falling to 2%, leaving the near-term policy rate path uncertain.
US-10Y.GB · Monetary · Neutral Mixed Fed signals on whether to hike again or hold keep the 10Y yield direction unclear, though receding hike expectations lean toward lower yields.
Dollar Hits Three-Month High as Oil Surges and Fed Stays Hawkish
The U.S. dollar is strengthening on renewed Middle East tensions that pushed oil prices higher and on expectations of tighter Federal Reserve policy, with the dollar index at 101.7 as of Oct. 1, 2026, on track for a 2% monthly gain, its strongest monthly advance since June. The Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75-4% on Sept. 16, and with the PCE price index up 0.3% in August and annual PCE inflation holding at 3.4%, still well above the Fed's 2% target, markets expect continued hawkish policy in the near term. Brent crude climbed above $100 a barrel after President Donald Trump rejected an Iranian proposal aimed at resolving the conflict and reopening the Strait of Hormuz, while WTI crude is around $92 a barrel as of Oct. 1, 2026, and flows through the Strait of Hormuz were expected to reach 7.4 million barrels per day this month, per Reuters. Against this backdrop, several ETFs tied to the dollar, energy, Treasury yields and Japan's currency could remain in focus, including the Invesco DB US Dollar Index Bullish Fund UUP, with $430.30 million in assets under management and a 0.70% expense ratio, and the WisdomTree Bloomberg U.S. Dollar Bullish Fund USDU, with $278.20 million in assets and a 0.50% expense ratio. Energy funds drawing attention include the VanEck Oil Services ETF OIH, with $1.90 billion in assets and a 0.35% expense ratio, and the Energy Select Sector SPDR Fund XLE, with nearly $40 billion in assets and a 0.08% expense ratio.
EFFR.MM · Monetary · Positive Fed raised the benchmark rate 25bp to 3.75-4% and sticky 3.4% PCE inflation points to continued hawkish policy, lifting the effective funds rate.
US-10Y.GB · Monetary · Positive Hawkish Fed stance and above-target inflation keep upward pressure on Treasury yields, with the 10Y yield rising.
Dollar Weakens After US Reports September Nonfarm Payrolls Rose Only 29,000
The dollar weakened against major currencies, in line with the decline in US government bond yields, after the US reported sluggish employment figures, which will support the Federal Reserve in holding interest rates steady at this month's monetary policy meeting. At 9:38 pm Thailand time, the dollar index, which measures the dollar's movement against six major currencies in a basket, fell 0.38% to 101.71, while the dollar weakened 0.34% to 1.128 against the euro and dropped 0.36% to 157.51 yen. The US Labor Department reported that nonfarm payrolls rose by only 29,000 in September, below analysts' forecast of 89,000. The unemployment rate rose to 4.2%, while analysts had expected it to hold steady at 4.1%. The Labor Department also revised August payrolls to an increase of 133,000 from a previously reported gain of 162,000. The private sector added 46,000 jobs in September, while government employment fell by 17,000. Meanwhile, average hourly earnings rose 3.0% in September from a year earlier, below analysts' forecast of 3.2%, and edged up 0.1% month on month, below the expected 0.3%. The yield on 30-year US government bonds fell to 5.570% after earlier surging to its highest level since 2002, while the 10-year yield fell to 5.180% after hitting its highest since 2002 this week, and the 2-year yield fell to 4.730%. Investors increased their bets that the Fed will hold rates steady at its October meeting following the sluggish employment data, having previously expected a rate hike this month. The latest FedWatch Tool from CME Group indicates that investors assign an 83.9% probability to the Fed holding rates at 3.75-4.00% at the October meeting, up from just 35.8% a week earlier. In addition, investors assign a 16.1% probability to the Fed raising rates by 0.25% to 4.00-4.25% at the October meeting, down from as much as 64.2% a week earlier.
EFFR.MM · Monetary · Negative Sluggish September payrolls (+29k) and rising unemployment boost odds the Fed holds rates steady, implying no hike and downward pressure on the effective fed funds rate.
US-10Y.GB · Monetary · Negative Weak jobs data and increased bets on the Fed holding rates steady pushed the 10-year Treasury yield down to 5.180%.
US-2Y.GB · Monetary · Negative Dovish repricing after the weak payrolls report drove the 2-year Treasury yield down to 4.730%.
US-30Y.GB · Monetary · Negative The 30-year Treasury yield fell to 5.570% as weak employment data supported the Fed holding rates steady.
Dow Jumps More Than 400 Points as Bond Yields Fall on Weak Jobs Data
The Dow Jones Industrial Average surged more than 400 points today, buoyed by a decline in U.S. Treasury yields after the release of lackluster employment figures, which is expected to support the Federal Reserve in holding interest rates steady at this month's monetary policy meeting. As of 8:48 p.m. Thailand time, the Dow Jones Industrial Average was up 453.47 points, or 0.89%, at 51,380.03. The U.S. Labor Department reported that nonfarm payrolls rose by only 29,000 in September, below analysts' forecast of 89,000, while the unemployment rate rose to 4.2%. The Labor Department also revised August payrolls to an increase of 133,000 from the previously reported gain of 162,000. The yield on the 30-year U.S. Treasury bond fell to 5.570% after earlier surging to its highest level since 2002. The yield on the 10-year Treasury note fell to 5.180%, and the 2-year yield fell to 4.730%. Most recently, the CME Group's FedWatch Tool indicated that investors now assign an 83.9% probability to the Fed holding rates at 3.75-4.00% at its October meeting, up from just 35.8% a week ago.
US bond yields fall as investors bet Fed will hold rates in October after weak jobs data
US government bond yields fell today after the release of weak employment figures, which would support the Federal Reserve in holding interest rates steady at this month's monetary policy meeting. The yield on the 30-year US Treasury note dropped to 5.570% after earlier surging to its highest level since 2002. The yield on the 10-year US Treasury note, the main benchmark for setting interest rates on mortgages, auto loans and credit card debt, fell to 5.180% after climbing this week to its highest level since 2002. The 2-year yield, which often moves in line with the Fed's policy rate decisions, fell to 4.730%. Investors sharply increased their bets that the Fed will hold rates at its October meeting following the weak jobs data, having previously expected a rate hike this month. The latest CME Group FedWatch Tool shows investors pricing an 83.9% probability that the Fed will keep rates at 3.75-4.00% at the October meeting, up from just 35.8% a week ago, and a 16.1% probability that the Fed will raise rates by 0.25% to 4.00-4.25%, down from as much as 64.2% a week ago. The US Labor Department reported that nonfarm payrolls rose by only 29,000 in September, below analysts' forecast of 89,000. The unemployment rate rose to 4.2%, while analysts had expected it to hold steady at 4.1%. The Labor Department also revised August payrolls to an increase of 133,000 from a previously reported gain of 162,000. Private-sector employment rose by 46,000 in September, while government employment fell by 17,000. Average hourly earnings rose 3.0% in September from a year earlier, below analysts' forecast of 3.2%, and edged up 0.1% from the previous month, below the expected 0.3%. The US labor force participation rate, which shows the share of the population in the workforce, stood at 61.8%.
EFFR.MM · Monetary · Negative Weak jobs data sharply raised bets the Fed will hold rates at the October meeting, lowering the expected policy rate path.
US-10Y.GB · Monetary · Negative 10-year Treasury yield fell to 5.180% as weak employment figures boosted expectations the Fed will hold rates steady.
US-2Y.GB · Monetary · Negative 2-year yield, which tracks Fed policy expectations, fell to 4.730% on increased odds of a rate hold.
US-30Y.GB · Monetary · Negative 30-year Treasury yield dropped to 5.570% after weak jobs data supported holding rates steady.
US Bond Yields Surge to 5.34%, Pressuring Small Caps and Bank Stocks
Rising interest rates and US bond yields are weighing on small-cap, bank, and utility stocks in the United States, dragging down the Russell 2000 and the KBW Nasdaq Bank Index, with many market segments down at least 5% from their recent highs after the 10-year US Treasury yield climbed to 5.34%, its highest level since 2002. Although the S&P 500 sits less than 2% below its all-time high, rate-sensitive small caps and the two aforementioned sectors have faced heavy selling. Since the Federal Reserve raised interest rates last month for the first time in three years to curb inflation, analysts at iCapital told Bloomberg TV that most stocks in the market have fallen at least 5% from their recent highs, while some segments are down more than 15%, largely due to higher interest rates and tighter financial conditions. The S&P 500 Equal Weighted Index is on track for a seventh consecutive weekly decline, and if it extends its slide through Friday, it would mark only the third such streak in history, following the aftermath of the dot-com bubble in 2002 and the 2022 bear market. Meanwhile, the Russell 2000 has just posted its second-worst quarterly underperformance versus the S&P 500 since 1999, trailing the large-cap index by nearly 10 points and falling 8.5% from its August 14 high, bringing it close to correction territory. Zombie stocks in the Russell 2000 account for more than one-third of all companies in the index.
ISM signals surging US factory costs, risk of Bitcoin falling below $85,000
A report from the Institute for Supply Management, or ISM, dated October 1 said the US manufacturing prices index rose to 77.9, up 6.8 points from 71.1 in August, with 58.6% of respondents reporting higher input prices, compared with 46.2% in August. The manufacturing PMI stood at 54.5, new orders at 55.3 and employment at 52.7. This broader spread of rising input costs increases the risk to Bitcoin's funding backdrop if investors price in higher interest rates ahead of the October 2 employment report. On the latest policy backdrop, the Federal Open Market Committee, or FOMC, raised its target interest rate range by 0.25% to 3.75% to 4% on September 16, and on September 29 New York Fed President John Williams said another increase could be appropriate late this year if the economy follows his projections. Meanwhile, a study by New York Fed staff in February 2023 found no systematic response by Bitcoin to financial and macroeconomic news, so Bitcoin's direction depends on how investors interpret the employment data and rate expectations.
BTC · Monetary · Negative Surging US manufacturing input prices raise the risk of higher interest rates, pressuring Bitcoin's funding backdrop and risking a drop below $85,000.
EFFR.MM · Monetary · Positive Rising input costs and FOMC's 25bp hike to 3.75%-4% with Williams hinting at more tightening push the effective fed funds rate higher.
US-10Y.GB · Monetary · Positive Higher inflation and further rate-hike expectations lift the 10-year Treasury yield.
Asian stocks open lower on fears expensive oil will stoke inflation
Asian stock markets opened lower today as investors worried that elevated oil prices could accelerate inflation and force central banks to keep interest rates high for an extended period. Rising US government bond yields, which have climbed to multi-year highs, also continued to weigh on risk assets. Japan's Nikkei index opened down 0.93% at 68,313.46 points, while South Korea's composite index opened down 0.47% at 6,938.27 points. The yield on 10-year US government bonds jumped to 5.327%, the highest level since April 2002, while the yield on 30-year US government bonds climbed to 5.678%, a 24-year high. Lorie Logan, president of the Federal Reserve Bank of Dallas, said US inflation remains above the Fed's annual target and that the Fed still needs to raise interest rates significantly. However, surging bond yields may help bring inflation under control, which would reduce the need for more restrictive monetary policy. In addition, the US government has told Germany and France to release emergency diesel reserves to help lower soaring global fuel prices, warning that without action the United States could consider banning exports of US diesel. Meanwhile, China announced it will suspend exports of oil products in October amid concerns about domestic stockpiles.
US-10Y.GB · Monetary · Positive 10-year US Treasury yield jumped to 5.327%, highest since April 2002, as inflation fears and Fed tightening expectations push yields up.
US-30Y.GB · Monetary · Positive 30-year US Treasury yield climbed to 5.678%, a 24-year high, on elevated oil-driven inflation worries and hawkish Fed remarks.
EFFR.MM · Monetary · Positive Dallas Fed's Logan says inflation remains above target and the Fed still needs to raise rates significantly, implying a higher policy rate.
Two Fed Officials Dismiss October Rate Hike Expectations, Highlighting Data-Driven Stance
Two Federal Reserve officials argued this week that more data needs to be assessed before deciding the next move in monetary policy, leading markets to scale back expectations of a rate hike at the next Federal Open Market Committee meeting in October. New York Fed President Williams said on the 29th that one more rate hike before year-end could be appropriate, but noted that the Fed has time to assess economic indicators before determining the timing of the next increase, saying, "The Fed decided on policy measures at the September FOMC meeting, so there is no need to act hastily now." Fed Vice Chair Jefferson also said on the 1st, in a speech at the University of Virginia's Darden School of Business, that while he supports the rate hike decided at the September meeting, he sees no need to rush further increases, stating, "We need to carefully assess the direction of economic indicators, changes in the outlook, and the balance of risks before deciding on future policy adjustments." Following Williams's remarks, market expectations that the Fed would proceed with an additional rate hike at the October 27-28 FOMC receded, and Jefferson's comments helped solidify that shift in sentiment. Major global securities firms now expect the Fed to raise rates only once more this year, in December rather than October.
EFFR.MM · Monetary · Negative Two Fed officials dismissed an October rate hike, pushing market expectations for further tightening to December, so the expected policy rate path declines.
US-10Y.GB · Monetary · Negative Reduced odds of an October Fed rate hike lower expected short-term rates, pulling the 10-year Treasury yield down.
Fed's Bowman Sees No Urgent Need for Further Rate Action
Federal Reserve Vice Chair for Supervision Michelle Bowman said Thursday she does not currently see an urgent need for further rate adjustment. Speaking after a speech on lessons from the Fed's recalibration of the enhanced supplementary leverage ratio, Bowman said policymakers should take time to understand economic trends and the effects of the September hike before making further changes, adding that inflation remains above the central bank's target. Her comments followed similar remarks from Fed Governor Philip Jefferson, who said earlier Thursday he needs more time to assess the next step, and New York Fed President John Williams, who said Tuesday he saw no urgency for another rate hike. Last month the Federal Open Market Committee raised the federal funds rate target range by 25 basis points to 3.75%-4.00%, its first hike in three years. With at least three FOMC voters in no rush for another increase, the probability of a hike at the October meeting dropped to 26.0% on Thursday from 68.6% a week ago, according to the CME FedWatch tool, while the odds of a 25-bp hike in December rose to 63.2% from 39.0%.
EFFR.MM · Monetary · Negative Bowman and other FOMC voters see no urgent need for further rate hikes, lowering near-term hike odds and pushing the expected policy rate path down.
US-10Y.GB · Monetary · Negative Dovish Fed commentary reduces the odds of near-term rate hikes, pulling the 10-year Treasury yield lower.
Minneapolis Fed President Says Further Rate Hikes May Be Needed If Inflation Stays Stubborn
Minneapolis Federal Reserve President Neel Kashkari said on the 1st that further interest rate hikes may be necessary if the economy remains extremely resilient and inflation proves more stubborn than expected. In an interview with Reuters, Kashkari said he is "approaching with an open mind" how to proceed with rate increases, and that he does not "have a strong view on whether the October 27-28 meeting should decide on another rate hike." The Federal Reserve decided on a 0.25 percentage point rate increase at its September 15-16 Federal Open Market Committee meeting, and Kashkari holds a vote on the committee this year and had voted in favor of the hike. Based on economic indicators released since the September committee meeting, Kashkari said "the U.S. economy was stronger than I had expected," and noted that "the inflation rate is still too high." He also said the Federal Reserve's current policy is not significantly restraining the economy, and that "no signs of systemic risk are visible in the markets," while adding that the banking sector needs to be monitored carefully given rapid changes in borrowing costs. The final Federal Open Market Committee meeting of the year will be held on December 8-9.
US 10-Year Bond Yield Surges 87.1 Basis Points, Biggest Move in 32 Years, Reaching 5.31%
The US bond market faced heavy selling, with the 10-year Treasury yield climbing to 5.31%, the highest since 2007, and rising by 87.1 basis points in the quarter ending in September, the largest quarterly increase since 1994, according to data from LSEG. Meanwhile, the 30-year Treasury yield broke through 5.65%, the highest since 2002. The bond selloff was not confined to the United States, as debt markets worldwide came under pressure from rising energy costs, which fueled concerns that inflation could stay elevated longer than expected. At the same time, investment momentum in AI and data center construction continued to raise expectations for economic growth and long-term interest rates. In Japan, government bond yields rose by double digits for a fifth consecutive quarter, an unprecedented streak. Investors rushed to adjust their views on the direction of US monetary policy after the Fed raised rates in September. The market currently expects at least three more rate hikes by mid-2027. Andrew Lilley, chief rates strategist at Barrenjoey, an investment bank in Sydney, said the bear market in US government bonds was necessary after the economy entered a state in which underlying inflation is too high to be sustained, while the Fed has not yet responded adequately. He warned that the strength of other asset markets could come under pressure as bond yields remain high and attract more investment.
US-10Y.GB · Monetary · Positive US 10-year Treasury yield climbed to 5.31%, up 87.1bp in the quarter, the largest quarterly rise since 1994.
US-30Y.GB · Monetary · Positive 30-year Treasury yield broke through 5.65%, the highest since 2002, as the bond selloff deepened.
JP-10Y.GB · Monetary · Positive Japan government bond yields rose by double digits for a fifth consecutive quarter amid the global bond selloff.
EFFR.MM · Monetary · Positive Fed raised rates in September and market expects at least three more hikes by mid-2027, pushing the effective funds rate higher.
Goldman Sachs pushes back Fed rate hike forecast to December after lower-than-expected inflation
Goldman Sachs has pushed back its forecast for the Federal Reserve's next interest rate hike to December, from an earlier expectation of October, after U.S. inflation data came in below expectations. The personal consumption expenditures price index, or PCE, one of the inflation gauges the Fed tracks, rose 3.4% year-on-year in August, below economists' forecast of 3.7%. As a result, interest rate futures now reflect roughly a 38% probability that the Fed will raise rates by 0.25% in October, according to CME Group's FedWatch tool, down from about 51% in Tuesday's trading and nearly 71% a week earlier. Goldman Sachs said in a report that there is a high chance the Fed's policy-setting Federal Open Market Committee, or FOMC, will ultimately conclude that no further rate increases are needed. The Fed has just raised rates in September, its first increase in three years and its first policy move under new Fed Chair Kevin Warsh. Meanwhile, New York Fed President John Williams said the Fed still has time to assess various data before deciding when to raise rates again, and investors are watching the U.S. nonfarm payrolls report for September, due to be released this Friday.
EFFR.MM · Monetary · Negative Softer-than-expected PCE inflation and Goldman's call that no further hikes are needed lower the expected path of the effective federal funds rate.
US-10Y.GB · Monetary · Negative Reduced odds of further Fed rate hikes after cooler inflation push the 10-year Treasury yield lower.
GS · Monetary · Neutral Goldman Sachs pushed back its Fed rate-hike forecast to December after softer PCE inflation, a macro-rate call rather than a company-specific event.
CME · Demand · Positive CME Group's FedWatch tool is cited as the source for rate-hike probability data, highlighting usage of its interest-rate futures products.
Australia's trade surplus narrows to 495 million dollars in August
The Australian Bureau of Statistics reported that Australia's trade surplus fell to 495 million Australian dollars in August, down from 1.35 billion Australian dollars in July and below analysts' expectations of 2 billion Australian dollars, as imports grew faster than exports. Imports rose 5.8% month on month in August to 46.94 billion Australian dollars, driven by a 22.3% surge in capital goods imports, which included a 79.3% jump in imports of automatic data processing equipment and a 91.1% spike in non-monetary gold imports. Exports rose 3.7% month on month to 47.43 billion Australian dollars, recovering from a 3.3% decline in July, supported by a 20.2% increase in non-monetary gold exports and a 4.7% rise in exports of coal, coke and briquettes. The trade data was released just two days after the Reserve Bank of Australia raised its policy interest rate by 0.25% to 4.60%, its fourth hike this year, citing higher global energy prices and stronger technology goods prices amid demand for artificial intelligence.
EFFR.MM · Monetary · Positive RBA hiked its policy rate by 0.25% to 4.60%, citing higher global energy and tech goods prices, signaling a higher-rate environment for the Australian cash rate.
Kasikorn Research Center says gold plunges below $4,200, watch 4 factors shaping direction
Kasikorn Research Center reported that global gold prices fell below $4,200 per ounce in late September 2026, dropping $259 per ounce, or 5.8%, to a low of $4,110.55 per ounce, the weakest level since early August 2026. Meanwhile, domestic gold bar prices fell below 66,000 baht per baht-weight of gold, down 3,850 baht per baht-weight, or 5.5%, tracking the global market. Thai gold prices declined at a slightly slower pace than global prices, partly because the weaker baht helped limit pressure. The main pressure came from energy prices holding high amid conflict in the Middle East, which added to inflation pressure, prompting the US Federal Reserve to raise its policy rate at its September meeting and pushing US government bond yields sharply higher. Looking ahead, investors should monitor four key factors: the situation in the Middle East, the direction of bond yields, especially US bond yields, signals from the US Federal Reserve, and US economic data including inflation. Analysts surveyed by Bloomberg Consensus expect global gold prices at the end of 2026 may recover to around $4,465 per ounce, but Kasikorn Research Center believes the recovery may remain limited, given the prolonged Middle East situation, leaving short-term gold prices prone to high volatility, and market watchers should also consider the direction of the baht.
US PCE inflation comes in below expectations, supporting Fed pause on October rate hike
US inflation for August came in below analyst expectations, giving the Fed more room to wait and see economic data before deciding on a rate hike at its October meeting. The US Commerce Department reported that the Personal Consumption Expenditures price index, or PCE, rose 0.3% month-on-month, below the 0.4% increase economists in a Reuters poll had expected. Year-on-year, PCE rose 3.4%, matching July's figure, which was revised down from the previously reported 3.7%. Meanwhile, the core PCE index rose 0.2% month-on-month and 3.0% year-on-year, matching July, which was revised down from the previously reported 3.3%. The downward revisions to inflation figures were partly the result of the US Bureau of Economic Analysis, or BEA, changing its method for calculating prices of certain goods and services, along with revisions to historical data going back to 2021, which lowered the core PCE inflation rate by about 0.36 percentage points, more than the roughly 0.20 to 0.30 percentage points economists had expected. The lower-than-expected inflation data led financial markets to reduce the odds they assign to a Fed rate hike at its October 27-28 meeting, with the CME FedWatch Tool showing the market pricing in about a 41.5% chance of a hike, down from 51.5% before the data release and 70% last Monday. Earlier, the Fed raised its policy rate to a range of 3.75% to 4.00% in September, its first rate hike in three years. However, the US economy remains strong, with consumer spending jumping 0.9% in August after rising just 0.1% in July, and up 0.6% after adjusting for inflation. Second-quarter GDP grew at an annual rate of 2.2%, revised upward from the previous estimate.
EFFR.MM · Monetary · Negative Below-expectation PCE inflation cuts the odds of an October Fed rate hike, implying the policy rate stays lower than previously expected.
US-10Y.GB · Monetary · Negative Softer inflation and reduced October hike odds lower expected policy rates, pulling the 10-year Treasury yield down.
Soft PCE Reading Supports Fed Rate Hold in October as Saudi Arabia Warns of Energy Crisis
Investors increased their bets that the US Federal Reserve will hold interest rates steady in October after the US Commerce Department reported that the headline personal consumption expenditures price index, which includes food and energy, rose 3.4% in August from a year earlier, below analysts' forecast of 3.7%. On a monthly basis, headline PCE rose 0.3%, below the forecast of 0.4%. The latest FedWatch Tool from CME Group indicates that investors now assign a 62.9% probability to the Fed holding rates at 3.75-4.00% at its October meeting, up from just 49.1% previously. Minneapolis Fed President Neel Kashkari told CNBC that inflation remains too high even though the latest data came in below economists' expectations. Meanwhile, Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, Prime Minister of Saudi Arabia, said in the royal address opening the third year of the ninth term of the Shura Council that the world is facing an energy crisis with uncertain outcomes, and that Saudi Arabia continues to supply oil to global markets to maintain energy stability. In addition, the US Commerce Department reported in its third estimate that the US economy grew 2.2% in the second quarter of 2026, higher than the first and second estimates, which were both 1.5%. Cambodian Prime Minister Hun Manet announced a new monthly minimum wage for 2027 of 212 dollars for workers in the garment, textile, footwear, and travel goods industries, an increase of 2 dollars from the current base wage of 210 dollars.
EFFR.MM · Monetary · Negative Soft PCE reading (3.4% vs 3.7% forecast) raises odds the Fed holds rates at 3.75-4.00% in October, keeping the effective funds rate from rising.
US-10Y.GB · Monetary · Positive Softer-than-expected PCE inflation boosts bets on a Fed rate hold, supporting bond prices and pushing the 10Y yield lower.
Kashkari Says Inflation Still Too High Despite Cooler PCE Data
Minneapolis Federal Reserve President Neel Kashkari said Wednesday that inflation remains too high even after the latest reading of the Fed's preferred price gauge came in softer than economists expected. Speaking to CNBC's Steve Liesman in an exclusive one-on-one interview at a Council on Foreign Relations event in New York, Kashkari said the core personal consumption expenditures price index, which strips out volatile food and energy prices, ran at 3% on an annual basis in August, below forecasts. "There are many different measures of inflation, but it's running at around a 3% rate," Kashkari said, adding that inflation has been elevated for more than five years and that the data did not change his view. He said separate reports on consumer spending and gross domestic product released Wednesday showed the economy is resilient. The Fed this month delivered its first interest rate hike in three years to push back against higher-than-preferred price growth and signaled another increase could be coming.
EFFR.MM · Monetary · Positive Kashkari says inflation still too high and the Fed signaled another rate hike could be coming, implying the policy rate stays higher/rises
US-10Y.GB · Monetary · Positive Hawkish Fed stance (inflation too high, possible further hike) pushes the 10Y Treasury yield up
Investors raise bets on Fed holding rates in October after PCE comes in below expectations
Investors have increased their bets that the US Federal Reserve will hold interest rates steady in October, after the release of the Personal Consumption Expenditures price index came in below expectations, easing investors' concerns about inflation. The latest FedWatch Tool from CME Group indicates that investors now assign a 62.9% probability to the Fed holding rates at 3.75-4.00% at its October meeting, up from just 49.1% yesterday. Meanwhile, investors assign a 37.1% probability to the Fed raising rates by 0.25% to 4.00-4.25%, down from as much as 50.9% yesterday. The US Commerce Department reported that the headline PCE index, which includes food and energy categories, rose 3.4% in August from a year earlier, below analysts' forecast of 3.7%, and rose 0.3% month on month, below the expected 0.4%. The core PCE index, which excludes food and energy and is the inflation gauge the Fed watches most closely, rose 3.0% year on year, below the expected 3.3%, and rose 0.2% month on month, below the expected 0.3%.
EFFR.MM · Monetary · Negative Below-forecast PCE inflation raises the odds the Fed holds rates steady in October, lowering the expected path of the effective fed funds rate.
US-10Y.GB · Monetary · Negative Cooler-than-expected PCE inflation boosts bets on the Fed holding rates, pulling the 10-year Treasury yield lower.
Bitcoin Surges Above $85,000 After Soft Inflation Report
Bitcoin has surged back above the $85,000 level, rising 1.8%, according to CoinGecko data. The rally was primarily driven by a surprisingly soft inflation report, with the Personal Consumption Expenditures Price Index up 3.4% year over year in August versus analyst expectations of 3.7%, while the month-over-month headline figure rose 0.3%. Roughly $50 million worth of Bitcoin positions were liquidated over the past hour, with short positions accounting for $48 million of that wipeout, according to CoinClass. Expectations of an upcoming Federal Reserve rate hike have taken a hit, with CME FedWatch pricing showing the probability of another quarter-point hike at the Oct. 27-28 meeting plunging from 70% to 51.5% after New York Fed President John Williams said there was no need for urgency, and the odds have now fallen well below 50% following the inflation report. Earlier this week, Bitcoin had dropped below $85,000 on expectations of further monetary tightening, after the Fed announced its first rate hike in years on Sept. 16.
BTC · Monetary · Positive Soft PCE inflation report and falling odds of a Fed rate hike weaken the dollar/rate outlook, driving Bitcoin above $85,000.
EFFR.MM · Monetary · Negative Soft inflation and Williams' dovish remarks cut the probability of another quarter-point hike from 70% to below 50%, pushing the expected policy rate lower.
BLUEBELL Recommends Barbell Portfolio to Navigate Four Risks in Q4 2026
Bluebell Securities Company Limited, or BLUEBELL, disclosed that the fourth quarter of 2026 carries four key risk factors that could make markets volatile. First, inflation remains above the Fed's target; at its September meeting the Fed raised rates by 25 basis points, and services inflation is still around 3%. Second, the US midterm elections on November 3, 2026; data from BlackRock shows the S&P 500 has delivered average returns of only 7.5% in midterm years, compared with 12.3% in normal years, but it typically rebounds by an average of 14.1% in the six months after the elections. Meanwhile, the 10-year bond yield has risen above 5%, pressuring valuations even as the S&P 500 continues to hit all-time highs, up 11.23% year to date, and the Global PMI Diffusion Index remains at 70.21%. The Fed has raised its forecast for US real GDP growth in 2026 to 2.3%. On the supportive side, the Bloomberg Consensus expects MSCI World earnings to grow 30% by the end of 2026 and 14% in 2027. The AI super cycle continues to broaden its impact, with combined remaining performance obligations among hyperscalers exceeding 2 trillion US dollars. BLUEBELL recommends a Barbell portfolio allocation, mixing growth equity funds, defensive funds, and high-quality fixed income, while adding exposure to AI, healthcare, and emerging markets themes. It sets weights of 30% in ES-GCORE, 15% in ES-GAINCOME-A, 15% in UGISFX-N, 10% in ONEGLOBFIN-RA, 10% in KT-HEALTHCARE, 10% in DAOL-SUPERAI, 5% in KF-EMXCN-A, and 5% in DAOL-BRAZILEQ. It also warns investors to watch for volatility from the midterm elections and the possibility that the Fed may signal further rate hikes if inflation does not slow.
Bluebell Securities Company Limited · · Neutral Bluebell itself issues the Barbell portfolio recommendation and Q4 risk outlook, but the article reports no company-specific financial or business event.
EFFR.MM · Monetary · Positive Fed raised rates 25bp at its September meeting and may signal further hikes if inflation does not slow, pushing the policy rate/yield up.
US-10Y.GB · Monetary · Positive 10-year bond yield has risen above 5% amid above-target inflation and Fed tightening, pressuring valuations.
Williams Signals Rate Hike Pause, October Odds Fall to 44%
The odds of the Federal Reserve raising interest rates in October have reversed course entirely after New York Fed President John Williams said there is no need to rush another rate hike, with the probability of a 25 basis point increase falling from more than 70% to around 44%. Speaking at a lecture at the University at Buffalo, Williams said the Fed's unanimous decision last month to raise rates to a range of 3.75% to 4% gives policymakers enough time to assess incoming economic data before taking their next step. Data from the CME FedWatch Tool shows the odds of an October hike have fallen to about 44.8%, while the market, including traders on the Kalshi platform, has shifted toward holding rates steady, with that probability rising to 55.2%. However, signals from the Fed are not all pointing in the same direction. Fed Governor Michael Barr said the central bank has been knocked off course by strong AI demand and higher oil prices, suggesting policy may need to be rebalanced. Williams also expects another rate hike later this year if the economy follows his projections, and expects inflation to reach 3.5% by the end of 2026. Meanwhile, the global cryptocurrency market capitalization now stands at 2.95 trillion dollars, barely changed over the past 24 hours, with Bitcoin accounting for 1.67 trillion dollars and a market share of 56.62%. Roughly 13,800 BTC was transferred out of Binance, the largest single-day net outflow since 2023, and Bitcoin is trading below 83,213 dollars. Spot trading volume in altcoins reached nearly four times that of Bitcoin, while Glassnode's Altcoin Cycle Signal index climbed above 81.
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EFFR.MM▼
Dollar Holds Firm as October Fed Hike Odds Fall to 48%
The U.S. Dollar Index is trading at 101.37, holding above support at 101.33, as dovish remarks from New York Fed President Williams cut the odds of a 25 basis point rate hike in October from 71% to 48%. Williams said he saw no urgency after the September Fed rate hike and signaled a more gradual approach to future increases. Attention now turns to the September core PCE price index report due today and a two-day run of U.S. labor market data culminating in Friday's Nonfarm payrolls report. Elevated U.S. inflation and frequent issuance of U.S. Treasuries have pushed the 10-year U.S. Treasury note yield above 3.6%, supporting the greenback, while the euro heads for its worst monthly performance against the dollar in over a year as energy costs tied to the conflict in Iran and rising geopolitical tensions push French bond yields 115 basis points above their German counterparts. Sterling is trading at 1.3238, capped below 1.3250, with support at 1.3205, as Bank of England data showed unsecured consumer lending picked up in August, complicating the Bank's inflation fight. On the technical side, a break above 101.61 would shift the Dollar Index's focus to 101.83 and 102.03, while a close below 101.08 would turn the trend down; the euro faces resistance at 1.1353 and support at 1.1311, and the pound faces resistance at 1.3250 with support at 1.3205.
EFFR.MM · Monetary · Negative Dovish Williams remarks cut October hike odds to 48%, signaling a more gradual path and lower expected policy rate.
EURUSD.FOREX · Monetary · Negative Euro heads for worst month vs dollar as energy costs and Iran-linked geopolitical tensions widen French-German yield spreads.
US-10Y.GB · Monetary · Positive Elevated inflation and heavy Treasury issuance pushed the 10-year yield above 3.6%, supporting the greenback.
GBPUSD.FOREX · Monetary · Negative Sterling capped below 1.3250 as BoE data showed unsecured consumer lending picked up, complicating the inflation fight.
PCE for August in focus, headline seen up 3.7%, consumer confidence lowest in 12 years
Investors are watching the personal consumption expenditures price index, or PCE, for August, due for release tonight Thailand time. A survey of economists by Dow Jones expects both the headline PCE index and the core PCE index, which excludes food and energy prices, to rise 0.3% month on month. On a year-on-year basis, headline PCE is expected to rise 3.7% and core PCE 3.3%, unchanged from July, still far above the Fed's 2% inflation target. Michael Barr, one of the Fed governors, said tariff measures and a protracted war with Iran have stalled progress toward the inflation goal, and the Fed will likely need to keep raising rates. Meanwhile, John Williams, president of the Federal Reserve Bank of New York, pointed to the expansion of the artificial intelligence industry as another factor keeping inflation high, but struck a more dovish tone than Barr, saying another rate hike may be needed this year. On the consumer side, Wall Street economists expect U.S. consumer spending to rise 0.8% in August after a gain of just 0.2% in July. Bank of America reported that spending via debt and credit cards rose 6.9% from a year earlier in the week ending September 19, partly driven by gasoline expenses, which jumped 26.5%. Excluding that spending, overall outlays still rose 5.7%. However, data from the Conference Board released last night showed its consumer confidence index fell 6.7 points to 81.9 in September, the lowest since 2014 and below the Bloomberg survey estimate. Views on current economic conditions dropped nearly 8 points to the lowest since 2021, while expectations for the next six months fell to the lowest in more than a year.
EFFR.MM · Monetary · Positive Fed officials Barr and Williams signal further rate hikes may be needed as inflation stays above target, pushing the effective fed funds rate higher.
US-10Y.GB · Monetary · Positive Hawkish Fed commentary and sticky PCE inflation expectations lift the 10-year Treasury yield.
BAC · Demand · Neutral BofA reports card spending up 6.9% y/y, but this is its own data release, not a clear driver for the stock.
Kasikorn Thai expects SET today in a range of 1,585-1,610 points, watching US Core PCE
Kasikorn Securities estimates that the SET Index today will move in a range of 1,585-1,610 points, with the market watching the US August PCE and Core PCE figures, which are expected at 3.7% and 3.3% year-on-year respectively, before following non-farm payrolls data later in the week. Previously, the SET Index closed at 1,594.30 points, down 8.07 points, or 0.50%, pressured by selling in banking and energy stocks, with foreign investors net selling Thai shares of 7.685 billion baht. Meanwhile, the 10-year US bond yield moved near 5.25%, the highest since 2007, and the 30-year bond yield rose above 5.6%. New York Fed President John Williams said the Fed has no need to rush another rate hike, causing the market to somewhat reduce expectations for a rate increase in October. For strategy, it recommends gradually accumulating good fundamental stocks, with today's standout picks being ADVANC with a target price of 385.34 baht and EASTW with a target price of 6.70 baht.
ADVANC.BK · Capital · Positive Kasikorn Securities names ADVANC as a standout pick with a target price of 385.34 baht.
EASTW.BK · Capital · Positive Kasikorn Securities names EASTW as a standout pick with a target price of 6.70 baht.
EFFR.MM · Monetary · Neutral Market awaits US August PCE/Core PCE and Williams' comment that the Fed need not rush another hike, trimming October hike odds.
US-10Y.GB · Monetary · Neutral 10-year US bond yield near 5.25%, highest since 2007, with direction hinging on the upcoming PCE and payrolls data.
US-30Y.GB · Monetary · Neutral 30-year US bond yield rose above 5.6% amid the market's focus on US inflation data and Fed rate expectations.
Dollar Strengthens as Bond Yields Surge; Investors Eye US PCE and Jobs Data
The US dollar strengthened against major currencies in New York foreign exchange trading on Tuesday, September 29, after US Treasury yields surged to multi-year highs. The dollar index rose 0.17% to 101.372, while the 30-year bond yield jumped to 5.6206%, the highest level since June 2002, and the 10-year bond yield climbed to 5.293%, the highest since June 2007. New York Fed President John Williams said the Fed still has time to assess data before deciding on another rate hike, but Fed Governor Michael Barr and Chicago Fed President Austan Goolsbee continued to signal support for tighter monetary policy. Investors are watching the personal consumption expenditures price index, or PCE, due today, with analysts expecting headline PCE to rise 3.7% in August year on year and core PCE to rise 3.4%. Nonfarm payrolls, due Friday, October 2, are expected to increase by 98,000 in September after rising 162,000 in August, and the September unemployment rate is expected to hold steady at 4.1%. In the latest data, the Conference Board's US consumer confidence index fell 6.7 points to 81.9 in September, below analysts' expectations of 89.0, and JOLTS job openings fell by 256,000 to 7.079 million in August, below the forecast of 7.225 million.
EFFR.MM · Monetary · Positive Fed officials (Barr, Goolsbee) signal support for tighter monetary policy, keeping the effective fed funds rate elevated.
US-10Y.GB · Monetary · Positive 10-year Treasury yield climbed to 5.293%, highest since June 2007, on hawkish Fed signals and strong rate expectations.
US-30Y.GB · Monetary · Positive 30-year bond yield jumped to 5.6206%, highest since June 2002, amid tighter-policy signals and rising yields.
New York Fed's Williams Sees One More Rate Hike Late This Year
New York Fed President John Williams said Tuesday he expects one more interest rate hike will be appropriate late this year if the economy evolves broadly in line with his forecast. Williams said he is in no rush for another rate hike in October, after the Federal Open Market Committee raised its benchmark rate by 25 basis points at its September meeting, adding that there is no need for urgency and time to gather more information. He said the risk to maximum employment has receded while the risk to achieving price stability has increased, pointing to the inflationary impact of the AI-related demand shock and expecting somewhat larger and longer-lasting effects from energy prices on inflation. Williams expects real GDP growth to average 2 1/4% this year and next, slightly above its longer-run trend pace, and expects unemployment to tick down to about 4% over the next year. On inflation, he expects about 3.5% this year, just above 2% next year, and a return to the Fed's 2% longer-run goal in 2028, stressing that it is imperative to return inflation to the 2% target on a sustained basis.
Fed Rate Hike Seen Lifting First Horizon Net Interest Income
The Federal Reserve's latest 25-basis-point rate hike to a target of 3.75-4% could provide another tailwind to First Horizon Corporation's net interest income, or NII, as the bank enters a favorable asset-repricing cycle. First Horizon appears well-positioned for higher rates, with 58% of loans variable rate and another 12% in adjustable-rate mortgages as of June 2026, while about $5 billion of fixed-rate loans and $1 billion of lower-yielding securities are set to mature or generate cash flows over the next year. The company estimates that a 100-basis-point rate increase would boost NII by 2.9% over 12 months, suggesting the latest 25-basis-point hike should be modestly positive, though the benefit will depend on deposit pricing and balance-sheet trends. In the second quarter of 2026, First Horizon's NII increased 5% year over year to $679 million, while its net interest margin expanded 9 basis points to 3.49%, though its interest-bearing deposit rate rose to 2.33% as brokered deposits increased. Among peers, Bank of America's NII is estimated to rise by $1 billion over 12 months from a 100-basis-point parallel rate increase, and Citigroup's by $1.2 billion, though higher deposit costs and potential securities losses could temper those benefits.
FHN · Monetary · Positive Fed's 25bp hike to 3.75-4% should modestly lift First Horizon's NII given 58% variable-rate loans and a favorable asset-repricing cycle.
EFFR.MM · Monetary · Positive The Fed raised the target rate by 25bp to 3.75-4%, lifting the effective federal funds rate.
US-10Y.GB · Monetary · Positive The Fed's 25bp rate hike implies higher short-term policy rates, which typically push Treasury yields up.
BAC · Monetary · Neutral Mentioned only as a peer: BofA's NII estimated to rise $1B from a 100bp rate hike, but higher deposit costs and securities losses could temper the benefit.
C · Monetary · Neutral Mentioned only as a peer: Citigroup's NII estimated to rise $1.2B from a 100bp rate hike, though higher deposit costs and potential securities losses could offset.
Bank of England Deputy Governor Says Prolonged High Inflation Is Affecting Rate Decisions
Bank of England Deputy Governor Ramsden said that prolonged high inflation is influencing his thinking on interest rates, and that the likelihood of such a situation persisting increased between the July and September monetary policy meetings. The deputy governor responded to the question of whether, at upcoming meetings, energy price spikes and high inflation alone would be sufficient reason to support a rate hike, or whether clear evidence is needed that these are feeding into wage negotiations and corporate pricing. Speaking in a Q&A session after delivering a lecture at the Money, Macro and Finance Society, he said, "It looks like we are in a phase where headline inflation is higher and more persistent. So it is starting to influence my thinking." He also indicated that by the next meeting in November, some initial evidence pointing to the direction of 2027 wage negotiations should be available. Wages agreed in negotiations mainly take effect in March and April.
Dollar Strengthens as Fed Rate Hike Bets Aimed at Curbing Inflation; US Jobs Data in Focus
The US dollar strengthened against major currencies in trading on the New York foreign exchange market on Monday, September 28, as rising oil prices led the market to expect that the US central bank may raise interest rates further to curb inflation. The dollar index rose 0.22% to 101.197, while the US dollar strengthened against the yen to 157.40 yen from 157.13 yen on Friday, and the euro weakened against the US dollar to 1.1368 dollars from 1.1399 dollars. Crude oil prices surged about 3% after President Donald Trump rejected Iran's conditional proposal regarding the reopening of the Strait of Hormuz, before paring gains later. As a result, the yield on 10-year US Treasury bonds jumped above 5.2% to 5.261%, and the 30-year yield reached 5.571%. Several Fed officials signaled support for further rate hikes, with Lisa Cook, a member of the Fed's Board of Governors, saying on Monday that she expects inflationary pressures to continue rising in the coming months due to demand related to artificial intelligence technology and higher oil prices. Meanwhile, the CME FedWatch tool indicated that investors priced in a 70.3% probability that the Fed will raise interest rates by another 0.25% at its October meeting, up from 57.6% last week and 17.7% last month. Analysts expect the September nonfarm payrolls figure, to be released on Friday, October 2, to show an increase of 98,000 jobs, after a gain of 162,000 in August, and expect the September unemployment rate to hold steady at 4.1%.
EFFR.MM · Monetary · Positive Fed officials signal support for further rate hikes and markets price a 70.3% chance of a 25bp October hike, pushing the effective funds rate higher.
EURUSD.FOREX · Monetary · Negative Euro weakened against the dollar to 1.1368 as rising Fed rate-hike expectations boosted the greenback.
US-10Y.GB · Monetary · Positive 10-year Treasury yield jumped above 5.2% to 5.261% on rising Fed rate-hike bets and surging oil prices.
US-30Y.GB · Monetary · Positive 30-year Treasury yield reached 5.571% as markets priced in further Fed tightening to curb inflation.
USDJPY.FOREX · Monetary · Positive Dollar strengthened to 157.40 yen as Fed rate-hike bets and higher Treasury yields lifted the US currency.
Fed's Cook Warns AI Inflation May Be Broadening Beyond Tech Sector
Federal Reserve Governor Lisa Cook said Monday that the AI buildout could push price pressure into other parts of the economy, including construction and energy. Speaking at Oakland Tech Week in Oakland, California, Cook said a large portion of the rise in equity prices over the past few years can be attributed to enthusiasm about AI, and that added wealth appears to be feeding through to household spending. She pointed to water and electricity costs running at over a 3% annual pace so far this year as a sign the pressure may be broadening, warning that even as inflation in the narrow AI sector moderates, new and more broadly based price pressures may take its place. Cook said a productivity boom from AI could offset that broadening pressure if it boosts supply capacity more than it increases demand, and she expects continued inflation pressure from the AI buildout as well as from the pass-through of higher oil prices and supply chain disruptions caused by the conflict in the Middle East. Cook voted to raise the Federal Reserve's benchmark interest rate by 25 basis points to 3.75%-4.00% at its Sept. 15-16 meeting, and said the number and magnitude of any future adjustments will be informed by the economy's reaction to policy actions so far and by inflation and labor data over the coming months.
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EFFR.MM · Monetary · Positive Cook voted to raise the Fed's benchmark rate by 25bp to 3.75%-4.00% and warns of broadening AI-driven inflation, implying a higher policy rate.
US-10Y.GB · Monetary · Positive Hawkish Fed stance (25bp hike, warnings of broadening inflation from AI buildout, oil pass-through, and Middle East supply disruptions) pushes the 10Y yield higher.
Fed Governor Cook Signals Continued Inflation Pressure, Further Rate Hikes Depend on Data
Federal Reserve Governor Cook said on the 28th that inflation pressures are likely to persist over the coming months, driven by artificial intelligence-related demand and higher crude oil prices. She stopped short, however, of saying that further rate hikes would be necessary. In prepared remarks for a conference on AI and emerging technologies in Oakland, California, she noted that "the labor market appears well positioned to handle rate increases," and said the number and size of any future adjustments would be judged based on the economy's response and inflation and employment data in the coming months. In September, the Fed raised its policy rate for the first time in three years to bring inflation back to its 2% target "more quickly," and Cook supported that move. Financial markets currently price in roughly a 75% probability that the Fed will raise rates in October, and see a strong chance it will deliver a third consecutive hike at its December meeting, but Cook did not endorse that market view. She noted that headline inflation over the 12 months through August was about 3.8%, nearly double the 2% target, and projected that inflation pressures will persist in the coming months amid the buildout of AI-related infrastructure as well as the spillover from higher crude oil prices and supply chain disruptions tied to the conflict in the Middle East.
EFFR.MM · Monetary · Positive Cook signals inflation pressures persist and markets price ~75% odds of an October hike, supporting a higher policy rate.
US-10Y.GB · Monetary · Positive Hawkish Fed commentary on persistent inflation and possible further hikes pushes the 10Y yield higher.
Bank of England Deputy Governor Ramsden Signals Possible Rate Hike if Inflation Overshoots
Bank of England Deputy Governor Ramsden said in a speech in London on the 28th that if upward pressures on the inflation outlook intensify further, it could justify raising the policy rate. He expressed the view that rising energy prices could trigger a chain of wage and price increases, and explained that he continues to closely monitor the risk that higher energy costs associated with the Iran war pose to prices. The Monetary Policy Committee decided this month, by a vote of 6 to 3, to keep the policy rate unchanged at 3.75%, but it indicated that inflation is expected to peak at around 4%, a level significantly above the Bank of England's previous forecast. Investors expect a 0.25 percentage point rate hike at the Bank of England's November meeting. Ramsden stressed that the Bank of England's current policy stance is already restrictive, and said that without the Iran war, at least two rate cuts would have been made by now and the policy rate would be at least 0.5% lower than its current level.
GBPUSD.FOREX · Monetary · Positive Hawkish BoE signal (possible hike, investors pricing a November hike) makes sterling more attractive versus the dollar.
EFFR.MM · Monetary · Positive Ramsden signals a possible BoE rate hike if inflation overshoots, a hawkish policy signal that lifts UK policy-rate expectations.
Dollar Near 2-Month High as US-Iran Talks Stall, Driving Oil Higher
The dollar index held steady near a two-month high, supported by a stalemate in peace talks between the United States and Iran, which pushed oil prices sharply higher and increased the likelihood that the Federal Reserve will raise interest rates. As of 11:05 p.m. Thailand time, the dollar index was up 0.24% at 101.210 and was on track for a 1.7% gain this month, which would be its largest monthly increase since June. Meanwhile, investors increased their bets that the Fed will raise rates twice more this year, with the CME Group's FedWatch Tool indicating that investors now assign a 68.1% probability to a 0.25% Fed rate hike to a range of 4.00-4.25% at the October meeting, up from 57.6% a week earlier, and a 55.1% probability of another 0.25% increase to 4.25-4.50% in December, up from 44.1%. In global oil markets, crude prices surged more than 3%, with West Texas Intermediate crude breaking above 95 dollars per barrel and Brent crude topping 108 dollars per barrel, after President Donald Trump rejected Iran's conditional peace proposal to open the Strait of Hormuz and told aides he expected the United States to strike Iran again after the November midterm elections. Investors are also watching several economic data releases this week, including the August personal consumption expenditures price index due on Wednesday, manufacturing figures on Thursday, and the September nonfarm payrolls report on Friday.
Iran War Closes Two Straits, Sends Brent Up 70%; VLCC Rates Top $400,000
The conflict between the United States and Israel and Iran that erupted on February 28 shut down both the Strait of Hormuz and the Bab el-Mandeb Strait, key passages for the world's oil and goods, at the same time. Brent crude closed at $103.87 a barrel on September 18, up about 70% since the start of the year, and touched a four-year high of $126, after trading at around $68 to $70 a barrel before the war. Traffic through the Strait of Hormuz, which once carried about 20 million barrels of oil a day, fell by roughly 95%, and war risk insurance premiums surged from about 0.25% to between 3% and 10% of a vessel's value, pushing VLCC charter rates from the Middle East to China to $423,736 a day in early March, the highest level since record-keeping began in November 2005. Saudi Arabia's crude oil exports fell from more than 7.5 million barrels a day at the start of the year to about 2.1 million barrels in the first half of September, a drop of more than 70%, after the East-West pipeline was suspended on September 11 and Aramco halted loadings at the Yanbu port. On the domestic impact, Thailand imports about 57% of its oil from the Middle East, diesel prices jumped from 29.94 baht a liter to 50.54 baht a liter on April 7, and the OECD expects Thailand's GDP growth to fall from 2.4% in 2025 to 1.7% in 2026. The Fed raised interest rates by 0.25% to 3.75% to 4% on September 16, its first hike since 2023, while the WTO expects global goods trade to grow 1.9% in 2026, down from 4.6% in 2025, and the IMF expects the world economy to grow 3.0% in 2026 and 3.4% in 2027.
Defense & Geopolitical Fragmentation › Defense Primes — Europe & Asia Geopolitics
BRENT · Supply · Positive The two straits' closure and Saudi export collapse (7.5M to 2.1M bpd) drove Brent up ~70% to $103.87.
EFFR.MM · Monetary · Positive The Fed raised rates 0.25% to 3.75%-4% on September 16, its first hike since 2023, lifting the effective federal funds rate.
WTI · Supply · Positive Closure of the Strait of Hormuz and Bab el-Mandeb plus Saudi export cuts tighten global crude supply, lifting WTI.
US-10Y.GB · Monetary · Positive The Fed's first rate hike since 2023 pushes policy rates and bond yields higher, so the 10Y yield rises.
Saudi Aramco · Supply · Neutral Aramco halted Yanbu loadings and Saudi exports fell over 70%, cutting volumes, but the supply-driven oil price surge boosts per-barrel revenue.
Bessent Urges Fed to Keep an Open Mind on Rates, Says AI Boosts Economy Without Fueling Inflation
US Treasury Secretary Scott Bessent called on Federal Reserve policymakers to keep an open mind on interest rates, saying he believes productivity gains from artificial intelligence and deregulation will help keep US inflation at an appropriate level. In an interview on Fox News's Sunday Morning Futures on Sunday, September 27, Bessent said the economy is growing strongly under President Donald Trump, partly as a result of tax cuts and deregulation, even though higher oil prices stemming from the conflict with Iran are hitting Americans ahead of the November midterm elections. He also said Fed Chairman Kevin Warsh recognizes that the US economy is growing in a similar or possibly stronger fashion than during Alan Greenspan's tenure as Fed chairman in the 1990s. The US Labor Department reported on September 11 that core CPI, which excludes food and energy, rose 0.3% in August from a month earlier, above analysts' forecast of 0.2%, and was up 2.4% year on year, in line with analysts' expectations. Just days after the CPI data was released, the Fed raised short-term interest rates by 0.25% to a range of 3.75% to 4.00% at its September 16 meeting, the first rate hike since 2023. Bessent argued, however, that core inflation is not running hot and has eased over the past few months.
EFFR.MM · Monetary · Neutral Bessent urges the Fed to keep an open mind on rates, but the Fed just hiked 25bp to 3.75-4.00% and he argues core inflation is not hot, giving mixed signals for the policy rate path.
US-10Y.GB · Monetary · Neutral Article discusses Fed rate hike and inflation debate without a clear directional signal for 10Y yields; higher oil prices from Iran conflict and easing core inflation cut both ways.
Krungthai expects baht to trade in 33.35-33.60 range today
Poon Panichpibool, a money and capital markets strategist at Krungthai GLOBAL MARKETS of Krungthai Bank, said the baht opened this morning at 33.46 per dollar, weakening from 33.34 per dollar at the close of last week. He estimated a 24-hour trading range of 33.35-33.60 per dollar and a weekly range of 33.00-33.85 per dollar. The baht still has downward momentum, with a risk of testing resistance at 33.50 per dollar and the next resistance at 33.85 per dollar, as long as the market remains concerned about the Middle East situation and energy prices hold at high levels. Pressure comes from the stance of President Donald Trump, who rejected conditions for ceasefire talks and the opening of the Strait of Hormuz by Iran, causing crude oil prices to reverse higher, weighing on both gold prices and the baht while supporting a rebound in the dollar. Meanwhile, the market has raised the odds that the FED will hike rates this year after most U.S. economic data came in better than expected and FED officials signaled readiness to raise rates to control inflation. The market sees about a 48% chance the FED will raise rates two more times this year and possibly two more times in 2027. The baht still faces two-way risk, so he recommends using a variety of hedging strategies, such as options strategies.
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