Effective Federal Funds Rate

The dollar rose today, buoyed by remarks from Christopher Waller, a member of the Federal Reserve Board of Governors and a permanent voting member of the Federal Open Market Committee, who voiced support for the Fed raising interest rates. As of 8:10 p.m. Thailand time, the dollar index was up 0.14% at 102.28, while the dollar gained 0.09% to 1.120 against the euro and strengthened 0.26% to 158.27 yen. Waller said the Fed may need to raise rates further to bring inflation back to its 2% target if economic data continue to come in as expected, and that tighter monetary policy may be needed to keep prices stable. In addition, the Fed's meeting minutes signaled that policymakers see inflation as the biggest risk to the U.S. economic outlook. Investors increased their bets that the Fed will hold rates steady at its October meeting after the Institute for Supply Management's U.S. services index fell to 54.9 in September, below the expected 55.2 and down from 55.4 in August. Most recently, the CME Group's FedWatch Tool indicated that investors assign an 80.6% probability to the Fed holding rates at 3.75-4.00% at its October meeting, and a 70.2% probability to the Fed raising rates by 0.25% to 4.00-4.25% at its December meeting. The market is watching next week's releases of the consumer price index and producer price index ahead of the Fed's monetary policy meeting on October 27-28.

US Treasury yields rose today after the market digested the results of this week's bond auctions. As of 6:51 p.m. Thailand time, the yield on the 10-year Treasury stood at 5.244%, while the 30-year Treasury yield stood at 5.617%. On Thursday, the US Treasury sold 22 billion dollars of 30-year government bonds, with indirect bidders, including foreign central banks, purchasing more than 72% of the amount offered in the auction, above the average of 68% across the past 10 auctions. On Wednesday, the US Treasury sold 39 billion dollars of 10-year government bonds. Investors are also watching the situation in the Middle East, after US President Donald Trump confirmed that the United States will not attack Iran before the US midterm elections. Meanwhile, Christopher Waller, a member of the Federal Reserve Board of Governors and a permanent voting member of the Fed's monetary policy committee, voiced support for a Fed rate hike, saying the Fed may need to raise interest rates further to bring inflation back to the Fed's 2% target, provided the economic data due out in the coming days continues to come in as expected. Investors are watching next week's releases of the consumer price index and the producer price index, which will indicate the direction of interest rates, ahead of the Fed's monetary policy meeting on October 27-28.

Patrick Poullie, Head of Financial Markets at Siam Commercial Bank, or SCB, said the bank estimates the baht will move within a range of 33.25 to 33.85 per US dollar for the remainder of this year, noting that external factors, especially the war in the Middle East and the direction of global interest rates, remain the main pressures, causing the baht to swing with crude oil prices and the strengthening of the US dollar after the Federal Reserve signalled continued tight monetary policy to curb inflation. In the short term, the baht may weaken on periodic war concerns and the US election in November, as well as the risk that the US may raise tariffs on imports from Thailand under Section 301. However, a sharp spike in oil prices is less likely, and Thailand's trade balance tends to improve late in the year, supported by August export figures that grew faster than expected. For the outlook in 2027, SCB estimates the baht will weaken again, reaching 33.80 per US dollar in the first quarter and possibly approaching 34.50 per US dollar in the third quarter before gradually strengthening slightly late in the year, given US government bond yields that are likely to hold at high levels and a Thai economy still recovering unevenly, or in a K-shaped recovery, relying mainly on electronics exports and the US market, while domestic consumption and the labour market recover slowly. These factors will likely lead the Monetary Policy Committee to hold the policy rate at 1.0%, keeping the interest rate differential between Thailand and other countries a pressure on the baht. Nevertheless, factors that could reverse and support the baht next year include the chance that the Fed may raise rates only once, fewer than the market's expectation of three times, as well as the risk that the US government may face a temporary shutdown and that the war situation may ease until oil prices return to normal levels. Wachiravat Banchuen, a senior financial markets strategist at SCB, added that long-term US government bond yields have surged to their highest in more than two decades, driven by high fiscal deficits, a wave of corporate bond issuance, especially by large technology companies raising funds for AI, and inflation concerns from the war. He estimates the yield curve will tend to steepen, with two-year bond yields possibly declining gradually to 4.15-4.35% by late 2027 in line with a slowing US economy, while 10-year bond yields will fall only limitedly and remain high at 4.70-4.90%. For the US presidential election, the base case assumes the Democratic Party will win a majority in at least one chamber, which would check the government's power and make new fiscal stimulus harder, reducing government spending and possibly helping push long-term bond yields somewhat lower. The probability of a Democrat Sweep is put at 55%, and the case of Democrats taking the lower house while Republicans hold the Senate at 35%. However, if a Republican Sweep occurs, with a probability of about 10%, it would be an upside risk that drives government bond yields and the dollar sharply higher on concerns over rising fiscal deficits. In addition, the euro has faced heavy selling pressure recently from high energy prices and political uncertainty, especially in France, where investors worry about a change of government next year that could affect public debt and the budget deficit. If the far-right or far-left wins the election, it would widen the spread between French and German bond yields and drag the euro lower, but if centrist parties retain power, it would reduce political risk and help the euro recover somewhat amid lingering fiscal challenges.

MFC Asset Management has issued its investment outlook for the fourth quarter of 2026, saying global equity markets are likely to see high volatility amid uncertainty over the direction of US interest rates, energy prices and geopolitical risks. It recommends diversifying risk and gradually accumulating assets with strong fundamentals during market corrections. It highlights the Japanese stock market as the most attractive, with an Overweight weighting for both the short term of 0 to 3 months and the long term of 6 to 12 months, driven by demand for AI investment, corporate capital spending and capital market reform by the Tokyo Stock Exchange. The TOPIX index had a forward P/E of 16.17 times as of 25 September 2026. For the US, Chinese, Indian and Thai stock markets, MFC maintains a Neutral weighting for both the short and long term. The SET Index has a forward P/E of 13.79 times, about 0.8 standard deviations below its average, and foreign investors were net buyers of 25.11 billion baht between 1 January and 30 September 2026. For European equities, MFC assigns a Neutral weighting in the short term and an Underweight in the long term. For other assets, MFC recommends foreign bonds as a diversification tool and keeps a gold allocation of about 5 to 10% of the portfolio to hedge against volatility. Factors to watch next include the direction of US Federal Reserve policy after it raised rates by 0.25% to 3.75-4.00% on 16 September, the US midterm elections on 3 November, and Brent crude oil prices, which remain above 100 dollars a barrel.

Copper futures on the New York market closed lower on Thursday, October 8, with the COMEX December contract falling 8.10 cents, or 1.22%, to settle at 6.5685 dollars per pound. Analysts said the Federal Reserve's tight monetary policy stance, along with the prospect of a December rate increase, is weighing on investor confidence in base metals, after the market digested the latest Fed meeting minutes, which signaled support for another rate hike before the end of the year because inflation remains above target. Copper trading is also being influenced by the direction of copper demand in China, the country that consumes large volumes of the metal. Although real end-use demand from China had begun to show signs of recovery earlier, that support is starting to fade amid broader economic pressures.

Asian stock markets are likely to face pressure this morning amid concerns over rising oil prices and elevated government bond yields, which are adding uncertainty to the economic outlook and the direction of interest rates. Japan's Nikkei index opened down 0.6% at 68,648.50 points, pressured by electronics and metals shares, while South Korea's stock market is closed today for a national holiday. US President Donald Trump posted on Truth Social yesterday, confirming that the United States is making progress in talks with Iran and that the US will not attack Iran before the US midterm elections on November 3. Meanwhile, Iranian Foreign Minister Abbas Araghchi said Iran will send its response to US comments on a proposal to end the war within the next few days, after receiving US comments on Iran's seven-day proposal, and is carefully reviewing the details, with the two sides exchanging messages through intermediaries. At the same time, Christopher Waller, a member of the US Federal Reserve's Board of Governors and its monetary policy committee, said the Fed may need to raise interest rates further if economic data released gradually continues to come in as expected, in order to speed inflation back to the Fed's 2% target.

St. Louis Fed President Musalem said on the 8th that the Federal Reserve will need to raise interest rates further to bring inflation back to its 2% target. Speaking at a Bloomberg-hosted event in New York, Musalem said "additional tightening will be necessary to return inflation to target in a timely manner." Regarding the Federal Open Market Committee meeting on the 27th and 28th, he said only that he approaches every meeting with a very open mind and holds no preconceptions. Musalem does not have a vote on the FOMC this year.

The yield on the 10-year U.S. Treasury note climbed above 5.3% today after Christopher Waller, a member of the Federal Reserve Board of Governors and a permanent voting member of the Federal Open Market Committee, voiced support for the Fed raising interest rates. As of 10:15 p.m. Thailand time, the 10-year Treasury yield stood at 5.305%, while the 30-year Treasury yield was at 5.663%. Speaking at the Istanbul Economic Forum, Waller said the Fed may need to raise rates further to bring inflation back to its 2% target, provided the economic data due out in the coming weeks continue to come in as expected. He noted that the increases need not come in consecutive meetings, but should be carried out within an appropriate timeframe. He also said he supports a rate hike in September, not only because of the August consumer price index data but also because months of evidence show hiring remains strong and inflation has stayed persistently high. He expressed concern that the recent pickup in inflation is pushing consumers, investors, and businesses that set prices for goods and services to raise their expectations for future inflation.

Christopher Waller, a member of the US Federal Reserve's Board of Governors and a permanent voting member of the Fed's rate-setting Federal Open Market Committee, said the Fed may need to raise interest rates further to bring inflation back to its 2% target if upcoming economic data continue to come in as expected. Speaking today at the Istanbul Economic Forum, he said rate increases need not come at consecutive meetings but should be delivered within an appropriate timeframe, and he backed a rate hike in September, not only because of the August consumer price index data but also because of months of evidence showing hiring remains strong and inflation persistently high. Waller did not express concern that tighter financial conditions would significantly slow the US economy, since economic activity has picked up in the second half of the year, but he warned that the recent rebound in inflation is pushing consumers, investors and businesses that set prices for goods and services to raise their expectations for future inflation. He added that Fed officials' rate projections can reflect the direction of monetary policy, but future rate decisions will depend mainly on economic data.

Oil prices continued to climb on Thursday as Tehran-Washington tensions persisted following a report that the Trump administration may be considering renewed strikes on Iran. Brent crude rose to trade back near $105 per barrel, while West Texas Intermediate crude was close to $92 a barrel. The move followed reporting by The Atlantic that said President Trump may be considering striking Iran before the midterm elections, with the Pentagon weighing options though no final decision has been made, and came amid recent increased incidents of vessel attacks near the Strait of Hormuz. A tropical storm nearing the Gulf Coast and threatening to make landfall as a hurricane by Friday prompted Chevron to evacuate nonessential personnel from its offshore platforms in the region. David Morrison, senior market analyst at Trade Nation, noted that these factors outweighed the news that the International Energy Agency was accelerating the release of stockpiles of oil and distillates. Higher energy costs are adding to expectations that the Federal Reserve will maintain its tightening stance to curb inflation, with the market fully pricing in a 25 basis point rate increase in December, and the 10-year yield rising to 5.32%. Gasoline prices averaged $4.36 per gallon on Thursday per AAA data, while diesel stood at $6.28 per gallon, down $0.02 from Wednesday, and President Trump said Tuesday he is considering suspending the federal gas tax ahead of November's midterm elections.

Brown Brothers Harriman's Elias Haddad says higher oil prices are pressuring stocks and bonds while supporting a firmer dollar. The FOMC minutes showed most participants backing another rate increase by year-end, with futures fully pricing a 25 basis point hike to 4.00–4.25%.

Federal Reserve Governor Waller said on the 8th that additional rate increases will likely be needed to bring inflation down to the Fed's 2% target. However, he said there is "flexibility" in the pace of hikes, leaving open the possibility that the Fed could hold off on raising rates at the October 27-28 meeting of the Federal Open Market Committee. According to the text of a speech delivered at a forum hosted by Turkey's central bank in Istanbul, Waller said, "If economic data continues to come in as expected, I expect we will need to raise rates further to return inflation to our 2% target sooner," adding, "Rate hikes do not need to be carried out at consecutive meetings, but should be done within a reasonable timeframe." His remarks echo views expressed by other Fed officials in recent days, suggesting the Fed will likely leave the federal funds rate target unchanged at its current 3.75% to 4% at the October FOMC meeting. In September, the Fed raised the federal funds rate target by 0.25 percentage point, and projections released at the same time showed most Fed officials expect another 0.25 percentage point increase by year-end. Investors currently expect the Fed to hold the federal funds rate steady at the October FOMC meeting but to raise rates at the December 8-9 FOMC meeting six weeks later.

Trinity Securities assesses that global stock markets in the fourth quarter of 2026 will enter a Tug-of-War phase, with volatility driven by the push and pull between macroeconomic factors weighing on the market and microeconomic factors still providing support. Nattachart Mekmasin, Senior Assistant Managing Director of the Securities Analysis Department, stated that the SET's trading range for the remainder of the year is estimated at 1,500-1,700 points, based on a PE Model using three Forward P/E scenarios of 15.9 times, 14.8 times, and 13.8 times, together with 2026 EPS forecasts from the Bloomberg Consensus of approximately 110 baht, yielding appropriate index levels of 1,750 points in the best case, 1,630 points in the base case, and 1,510 points in the worst case, compared with the SET's current level of around 1,580 points. Key macroeconomic factors to watch are the direction of the Fed's monetary policy after it raised interest rates by 0.25% for the first time in this cycle in mid-September, and the U.S. midterm elections on November 3, 2026, for which Trinity's base case sees Democrats having a chance to win a majority in the House of Representatives, while Republicans are likely to narrowly retain their majority in the Senate, resulting in a Divided Congress. On the microeconomic side, support still comes from upward revisions to EPS estimates spread across many industries after second-quarter 2026 earnings beat expectations, while the Implied Equity Risk Premium stands at approximately 5.8%, above the long-term average of 4.0%, and the Real Policy Rate is negative at approximately -1.0% to -1.9%. For investment strategy, Trinity recommends a Bottom Fishing or Buy the Dip approach rather than chasing stocks during a bull market, while emphasizing Sector Rotation and Stock Selection, with five prominent stock themes selected: the livestock group, with BTG and TFG as top picks; the tourism group, with AWC and ERW; the retail group, with CRC and COM7; the processed agricultural products group, with STA and TVO; and the group benefiting from FDI, with AMATA and STECON.

Global stock markets are facing pressure on multiple fronts. The yield on 30-year US Treasury bonds jumped to 5.7%, the highest in 24 years, while Brent crude oil rose to $101.2 per barrel as the Middle East war drags on with uncertainty. This month has seen at least nine attacks on ships, about half the number for all of September, and the IRGC has threatened to close illegal routes. There are also reports that President Donald Trump may order strikes on Iran before the US midterm elections. Meanwhile, the Federal Reserve remains hawkish: the September FOMC meeting minutes showed a unanimous 12-0 vote to raise rates by 0.25% to a range of 3.75%-4.00%, with one more hike expected before year-end to curb inflation that has stayed above target for more than five years. The core stance remains higher for longer. However, US inflation data due on October 14 could shift market views. Concerns about a yield shock feeding into funding costs are rising and increasing risks to asset quality, especially NPLs and credit costs, causing European bank stocks, which are relatively sensitive, to be sold off heavily. The STOXX Europe 600 Banks index fell 3.3% amid pressure on major banks: Societe Generale down 5.0%, Deutsche Bank down 4.7%, ABN AMRO down 4.4%, and UniCredit down 4.2%. Thailand is preparing to host the IMF-World Bank Annual Meetings from October 12-18, a key platform to showcase Thailand's potential and direction for upgrading its economic structure to policymakers, financial institutions, and global investors. Seven front-line industries represent the new growth engine: food with CBG, CPF, and ITC; modern automotive with AH, MGC, and KGEN; retail with CPALL and CRC; smart electronics and digital with DELTA and GULF; medical and wellness with BH and BDMS; tourism with AOT, CENTEL, and BEM; and creative economy with PLANB and BEC. These are sectors where Thailand has strong existing business bases and can extend into higher value-added activities. On foreign fund flows, although weightings have been reduced in several Asian markets, especially South Korea, India, Indonesia, and Taiwan, yesterday Thai fund flows began to show positive signs in both markets after heavy selling. Foreigners net bought 1.72 billion baht of Thai stocks and 6.26 billion baht of Thai bonds, a total net inflow of about 7.98 billion baht in a single day. Since the start of October, foreigners have still net sold about 7.44 billion baht of Thai stocks, but on the bond side, October has returned to net buying of 5.80 billion baht, reflecting that foreign flows are starting to show signs of selectively returning to some Thai assets. Strategically, from September 22 to October 6, 10 stocks stood out as being gradually accumulated by foreigners both directly and via NVDR: CPF, SCB, SAWAD, BH, BDMS, PTTGC, PTT, TOP, IRPC, and IVL. These fall into three themes: laggard, high season, and energy-petrochemicals. The RRG picture for most stocks is in the improving-leading zone or shows strong RS-momentum. For today's three Thai top picks, we choose BEM, which has a chance to win the contract for the southern Purple Line electric train and is poised for record annual profit in the third quarter; SCC, which benefits from the olefins business merger with PTTGC but whose share price still lags; and ITC, which benefits from the weak baht theme and is awaiting an M&A deal with companies in China and the US expected to conclude in 2026, offering further upside.

The minutes of the US Federal Reserve's September monetary policy meeting, published on Wednesday, October 7, showed that most Fed officials considered another interest rate increase before the end of this year to be appropriate, as inflation has remained above the Fed's 2% target for a prolonged period. At the two-day meeting that ended on September 16, the Federal Open Market Committee, or FOMC, voted unanimously 12-0 to raise short-term interest rates by 0.25% to a range of 3.75% to 4.00%, the first rate hike since July 2023. The Dot Plot report indicated that 16 of the 18 officials expected one more rate increase this year. The minutes also showed that Fed officials differed over the rationale for this rate hike, with some seeing it as a way to limit the impact of the energy price crisis and others viewing it as a move to curb demand-driven inflation, while stressing that future decisions will depend on incoming data and their effect on the economic outlook and the balance of risks. Fed Chair Kevin Warsh said at a press conference that inflation is too high and has persisted for too long, emphasizing the importance of restoring price stability to drive US economic growth.

Land and Houses Securities Public Company Limited assesses that the SET Index today is likely to soften and move within a range of 1,570-1,590 points, as the Thai stock market still lacks fresh positive factors. Most recently, the SET Index closed up 2.41 points, supported by energy and petrochemical stocks. Foreign investors were net buyers of 1.718 billion baht, and institutions were net buyers of 17 million baht. Securities company accounts were net sellers of 1.112 billion baht, and retail investors were net sellers of 624 million baht. The main pressure came from the yield on 10-year US government bonds, which surged to 5.36%, the highest in 24 years, before easing to 5.29% after a 39 billion dollar bond auction drew strong demand. Meanwhile, Brent crude oil prices remained above 100 dollars per barrel, and the September FOMC meeting minutes reflected that most committee members still saw one more rate hike this year as possibly appropriate. On investment strategy, Land and Houses Securities maintains its investment weighting at 70%, split into 55% Alpha and 15% Beta, and highlights BGRIM as a strategic top pick with a target price of 21.50 baht, support at 18.80 baht, resistance at 20 baht, and a stop-loss at 18.20 baht, driven by progress on PDP2026, Direct PPA, and its Data Center business, which currently has total generating capacity of 96 MW and is fully contracted, with plans to expand to 300 MW in Thailand and abroad, expecting new generating capacity of around 300-500 MW. It also recommends buying HMPRO with a strategic target price of 7.30 baht, support at 6.40 baht, resistance at 6.85 baht, and a stop-loss at 6.20 baht, driven by demand for home repairs and renovations after the flood situation eases, which should support sales in early the fourth quarter of 2026.

YLG Bullion International Co., Ltd. released its gold price trend analysis report for October 8, 2026, stating that gold closed down $53.20, its lowest level since August 5, after the dollar strengthened 0.4% and the 10-year US Treasury yield held near its highest level in more than 20 years. The report noted that yesterday prices fell below the $4,125-$4,104 range, turning the overall outlook bearish once again, and that if a rebound fails to break through $4,184, the correction may not be over. It recommended opening short positions if prices fail to rise past $4,140-$4,184, and buying back shorts if prices do not fall below $4,088-$4,066. Key factors also include remarks by Kansas City Fed President Jeff Schmid, who said further rate hikes may be needed to control inflation, while San Francisco Fed President Mary Daly indicated that the rate path depends on inflation pressures. Meanwhile, China's central bank continued buying gold, adding 740,000 ounces, or about 23 tonnes, in September, up from 650,000 ounces in August, bringing its gold reserves to 77.47 million ounces and marking a 23rd consecutive month of purchases.

The baht opened this morning at 33.64 baht per dollar, strengthening from yesterday's close of 33.72 baht per dollar, according to the Money Market and International Transactions Business Division of TMBThanachart, or ttb. The dollar strengthened against major currencies after the yield on 10-year US government bonds surged to 5.350%, the highest level since 2002, supported by expectations that the Fed will raise interest rates again this year. The minutes of the Fed's September meeting showed that committee members were divided on the reasons for a 0.25% rate hike, with some seeing it as a way to limit the impact of the energy price crisis, while others viewed it as a move to curb demand-driven inflation. Meanwhile, the CME Group's FedWatch Tool indicated that investors priced in only a 17.2% chance of a rate hike at the October meeting, down from 37.6% a week earlier, but assigned an 85% probability to a hike at the December meeting. As for foreign investors' portfolio positions, yesterday they were net buyers of 1.72 billion baht of Thai stocks and net buyers of 6.267 billion baht of Thai bonds.

Kasikorn Securities assesses that the minutes of the US Federal Open Market Committee, or FOMC, reflect officials' stance of still leaving the door open to one more rate hike by the end of the year, after the US economy remained strong and inflation stayed elevated. The minutes stated that all 19 officials supported a 0.25% rate increase to a range of 3.75–4.00% in September, while most officials saw a possible need for one more rate hike by year-end. However, the market has cut the probability of a rate hike at the October meeting to about 20% after some officials signalled they wanted to wait for more economic data. The US Consumer Price Index, or CPI, due on October 14 will be a key data point the market is watching to gauge the direction of monetary policy going forward. For the Thai stock market, Kasikorn Securities sees the issue as likely to have a slightly negative effect on the SET through pressure from bond yields and capital outflows, with high-valuation growth stocks as well as the finance sector carrying more risk than the broader market, while export stocks may get some support from the weaker baht.

The U.S. dollar strengthened against major currencies in trading at the New York foreign exchange market after U.S. Treasury yields surged to their highest levels in decades, supported by expectations that the Fed will raise interest rates again this year. The dollar index rose 0.4% to 102.242, while the yield on the 10-year U.S. Treasury note jumped to 5.350%, the highest level since 2002. The yield on the 30-year Treasury bond climbed to 5.724%, a 24-year high, and the 2-year Treasury yield rose to 4.818%. Concerns over supply disruptions from the war with Iran pushed oil prices higher, reviving inflation worries and increasing the odds that central banks will extend their rate-hiking cycles, which triggered a global bond selloff. The minutes of the Fed's September meeting showed that officials were divided over the rationale for a 0.25% rate increase. The CME Group's FedWatch Tool indicated that investors priced in only a 17.2% chance of a Fed rate hike at the October meeting, down from 37.6% a week earlier, but assigned an 85% probability to a Fed rate hike at the December meeting.

Foreign investors pulled a net $26.3 billion from emerging market bonds and equities in September, according to a report published by the Institute of International Finance on the 7th. It was the first month of net outflows since June, driven by rising U.S. Treasury yields and a stronger dollar amid the Federal Reserve's hawkish stance. Of that total, non-resident outflows from emerging market bond markets came to $7 billion, the first net outflow since March, when escalating conflict in the Middle East rattled global markets. Emerging markets came under pressure in September after the Fed, led by Chair Warsh, decided on its first rate hike since 2023 and signaled that inflation remained a continuing concern. Meanwhile, heavy overseas selling of South Korean stocks helped push September outflows from emerging market equities to $19.2 billion. The IIF noted that foreign investors' selling of South Korean shares has continued almost without interruption since the start of the year, peaking in September after the KOSPI rose 62 percent year to date.

The U.S. Federal Reserve Board released on the 7th the minutes of the Federal Open Market Committee meeting held on the 15th and 16th of last month. A majority of FOMC participants indicated that further rate hikes through the end of the year would be appropriate. With the Fed's 2% inflation target having gone unmet for more than five years, the minutes reflect a sense of caution over upside risks to prices, driven in part by higher crude oil prices stemming from the U.S.-Iran conflict.

According to the minutes of the September 15-16 Federal Open Market Committee meeting released by the Federal Reserve on the 7th, officials were divided over the reasons for raising interest rates. At its September meeting, the Fed decided to raise the federal funds rate target by 0.25 percentage points to 3.75-4.00%, and the decision was unanimous. The minutes noted that many participants stressed that, from a risk-management perspective, it would be prudent to keep the target range for the policy rate at a higher level. Meanwhile, other participants judged it important to prevent recent price shocks, such as in energy, from having broader effects on prices, and two participants supported the rate hike because they believed estimates of the neutral rate were higher than before. Several participants also expressed the view that the current policy rate is not restrictive, or that even if it is restrictive, the degree is small, and most participants judged that it would likely be appropriate to raise the target range for the federal funds rate again by the end of the year.

Most Federal Reserve officials expected another rate increase would be appropriate by the end of the year even as they raised the benchmark rate in September, according to minutes from the Federal Open Market Committee's Sept. 15-16 meeting released on Wednesday. At that meeting the FOMC raised the federal funds rate target range by 25 basis points to 3.75%-4.00%, its first rate hike in more than three years, as it seeks to rein in inflation that has remained elevated for more than five years. The minutes said many participants emphasized that a higher path for the target range would be prudent on risk-management grounds, providing insurance against inflation remaining persistently above target, while a number of participants viewed a higher path as necessary based on their modal outlooks. Several participants considered the current policy rate of 3.50%-3.75% to be not restrictive or only mildly restrictive, and officials assessed that economic activity was expanding at a solid pace, citing robust business investment and resilient consumer spending. On the balance sheet, a few participants stressed the importance of planning for market stress even as Treasury markets had been functioning smoothly, and members generally considered trend productivity growth to be roughly in line with the historic average and somewhat higher than before the pandemic, though a few pointed to risks from rapid AI adoption that could drag on productivity.

Gold prices fell close to breaking below the $4,100 level today, pressured by a stronger dollar and a rebound in US government bond yields. As of 10:33 p.m. Thailand time, spot gold was down $54.31, or 1.45%, at $4,106.37 an ounce, while COMEX December gold futures fell $60.70, or 1.45%, to $4,126.40 an ounce. The yield on the 30-year US Treasury bond jumped to 5.724%, its highest level in 24 years. The 10-year yield rose to 5.350%, its highest since 2002, and the 2-year yield climbed to 4.818%. Kristalina Georgieva, managing director of the International Monetary Fund, said that even if conflict in the Persian Gulf region ends soon, energy prices are likely to remain elevated for some time. Meanwhile, investors are watching for the minutes of the Federal Reserve's latest monetary policy meeting, held in September, at which the Fed raised interest rates for the first time since 2023.

Apollo Global Management chief economist Torsten Slok is warning that further interest rate increases by Federal Reserve Chair Kevin Warsh could trigger a "higher rent doom loop," in which high rates suppress construction, tighten housing supply, and push rents and inflation higher. The Fed raised rates in September, its first hike in more than three years, and signaled more increases could follow this year and next. Realtor.com chief economist Joel Berner pushed back, saying the dynamic is not an imminent problem and is likely a few years down the road, because builders tend to add rental units as rents rise until construction costs outweigh rental profit. Average rents fell for the 37th straight month in August, with increases limited to San Francisco and San Jose, California, where the AI boom has driven rents up 4% year over year, along with Kansas City, Kansas, Pittsburgh, Pennsylvania, and Chicago, Illinois. Berner noted the roughly five-year lag between a rental permit and project completion, and U.S. Census Bureau data show housing completions fell 27.1% year over year in August.

The Reserve Bank of India raised interest rates by 25 basis points to 5.50%, its first hike since early-2023, sending Indian stocks lower on Wednesday. The Nifty 50 index fell 0.4% to 22,694.55 points, while the BSE Sensex 30 fell 0.55% to 72,684.51 points by 10:31 IST, with both indexes having dropped nearly 1% earlier in the session. Governor Sanjay Malhotra shifted the central bank's stance to calibrated tightening from neutral, citing sticky inflation, and the RBI said it expects headline CPI to average 5.8% over the next three fiscal quarters while core inflation is seen at 4.4% for the current financial year. The RBI also flagged continued economic resilience, projecting gross domestic product growth of 7.1% for the current year, and Capital Economics analysts said the decision supported their view that further 25 basis point hikes are likely in both December and February. The Nifty is trading down more than 13% year-to-date, making India's stock markets among the worst performers in the world so far in 2026.

Hua Seng Heng stated that gold prices declined in September amid pressure from continuously rising US government bond yields. The 10-year yield climbed to around 5.29%, while the 30-year yield rose above 5.6%, the highest level in decades, after the US Federal Reserve raised interest rates by 0.25% at its September meeting to a range of 3.75-4.00%. Hua Seng Heng noted that high bond yields are a direct pressure on gold, as it is an asset that pays no interest. When bond returns rise, the opportunity cost of holding gold increases accordingly, especially if real yields rise at the same time. The impact also extends to the cost of bond issuance, business loans, and fundraising, particularly among large technology companies that continue investing in artificial intelligence infrastructure. It is estimated that combined AI and infrastructure investment by major hyperscalers exceeds 700 billion dollars, while Goldman Sachs estimates that investment by these companies could rise to 1.1 trillion dollars by 2027. Hua Seng Heng assesses that the next key factor is the September US Consumer Price Index, scheduled for release on October 14. If inflation slows more than the market expects, it could allow bond yields to ease and support gold prices. It recommends gradually accumulating gold as prices approach 4,000 dollars per ounce, or domestic gold bar prices of around 64,000 baht per baht-weight of gold.

San Francisco Fed President Mary Daly said on the 6th that the case for further rate hikes will depend heavily on whether the shocks that have been pushing inflation higher move toward resolution or, conversely, compound one another and persist. In an interview with Axios, Daly explained that she supported a rate hike at the September Federal Open Market Committee meeting in light of rising inflation risks. She added that if tariff measures, the surge in crude oil prices tied to Middle East conflicts, and artificial intelligence turn out to be conventional shocks with only temporary effects, further rate hikes may not be necessary, and she said she still assigns some probability to that outcome. On the other hand, she said that if these shocks create compounding effects or last longer than expected, additional tariffs imposed in a second round of tariff negotiations could layer a second shock on top of the first and prolong the period of impact. She also said that rising demand for AI-related semiconductors could add to inflation pressures and make the effects of the shocks longer lasting. Daly does not hold a vote on this year's Federal Open Market Committee.

SHF Holdings, Inc., doing business as Safe Harbor, reported preliminary third quarter 2026 deposit results showing its trailing 14-day average deposit balance reached approximately $119.3 million as of September 30, 2026, up 7.4% from approximately $111.1 million a year earlier and roughly 25% above the trailing 14-day average low of approximately $95.3 million recorded in May 2025. The quarter-end trailing 14-day balance is the company's highest since April 2024, and the sequential increase of approximately 9.6% from approximately $108.9 million as of June 30, 2026 was more than double the increase recorded in the second quarter, which itself rose approximately 4.1% from approximately $104.6 million as of March 31, 2026. Safe Harbor also estimated that the Federal Reserve's 25-basis-point increase in the federal funds target rate on September 16, 2026 will contribute approximately $150,000 in incremental annualized investment income, based on client deposit and loan balances as of September 30, 2026 and assuming those balances and current partner financial institution arrangements remain unchanged. CEO Terry Mendez said the continued growth in deposits reflects the strength of the strategy the company has put in place as it broadens its platform across banking, lending, business solutions and institutional infrastructure. The preliminary figures have not been audited or reviewed by Safe Harbor's independent registered public accounting firm and remain subject to the company's normal quarter-end closing and review procedures, with full third quarter 2026 financial results to be reported at a later date.

The World Bank has raised its economic growth forecast for the East Asia and Pacific region in 2026 by 0.3 percentage points to 4.5%, up from its April estimate, driven mainly by exports of goods related to artificial intelligence. The region covers 23 economies, including China, Vietnam, Indonesia, Malaysia and Thailand, and growth is expected to slow to 4.4% in 2027 and 4.3% in 2028. Vietnam received the largest upgrade, up 1.1 percentage points to 7.4%. The World Bank said AI-related goods contributed more than half of export growth in most countries in the region, and accounted for more than 70% of export growth in Malaysia, the Philippines, Thailand and Vietnam. China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam together exported AI-related goods worth 1.4 trillion dollars in the 12 months ending in April. Meanwhile, South Korea's exports in September rose 83.5% to a record high of 120.9 billion dollars, with chips accounting for about half of total exports, and Samsung Electronics and SK Hynix together carried a weight of 43% of the Kospi index value at the end of April. The World Bank warned that a key risk lies in AI capital spending, which has reached about 6% of US GDP, close to the peak level of information technology investment in 2000. Of the total planned AI capital expenditure of 2.9 trillion dollars between 2025 and 2028, about 800 billion dollars is expected to come from private credit markets, with the share of AI-related lending rising to 34% of all activity in 2025, compared with an average of just 18% over the previous five years. Meanwhile, the US Federal Reserve raised interest rates last September, its first hike in more than three years, and signalled it may raise rates once more this year. The World Bank estimates that if the US economy slows by 1 percentage point, growth in other emerging markets would fall by about 0.6 percentage points. Taiwan has raised its 2026 economic growth forecast to 11% from 9.6%.

Westpac Banking Corp reported that Australia's consumer confidence index fell 4.7% in October to 80.4, after the Reserve Bank of Australia raised interest rates and as pressure from higher oil prices weighed, leaving households worried about the outlook for the job market and the cost of living. A reading below 100 indicates that negative views still outnumber positive ones. Among the 40% of respondents surveyed after the RBA announced its rate decision, the sub-index dropped to 67.2, a strikingly weak level. Matthew Hassan, Westpac's head of Australian macro forecasting, said Australian consumers remain trapped in a cost-of-living nightmare that seems to have no end, and at just above 80, the latest confidence reading is one of the 40 worst since the monthly survey began in the early 1970s. The RBA raised its policy rate last week to a 15-year high of 4.6%, its fourth hike this year, adding to household pain through higher borrowing costs and surging oil prices driven by the protracted conflict in the Middle East.