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.
FOMC minutes show officials still leave the door open to one more rate hike by year-end, supporting the effective fed funds rate.
Hawkish FOMC stance and elevated inflation keep upward pressure on Treasury yields, pushing the 10Y yield higher.
