SPDR Djia

One rate hke decided unanimously is highly anticipated by the market. Dot plot with 16 out of 18, expectations of further monetary tightening, sending a very hawkish signal. Revaluation of AI companies and rate sensitive sectors like property and bond markets may take the hit. So sit tight, buckle up your safety belt, and bumpy ride ahead.

Personally, I didn’t thought that the stocks fell that much (yet) after the rates announcement. I guess most people are bracing for further hikes too

It looks like the Fed has decided to listen to the market and give them what they want. The Fed is not ‘independent’ after all! If they don’t listen to the president, they listen to the market.

Well looks like it is the same old Fed after all! Haha…..for all the chest pumping and assertions that ‘this Fed’ is different from its predecessors, they are still following what ‘the market’ wants.

Fed raised their rate.

US Stocks Intel, Lumentum, and SK Hynix increase. However, Circle, Robinhood, Coinbase, Dow Jones, S&P 500, Nasdaq decrease.

Local Straits Times and banks’ shares rise.

But Hong Kong Hang Seng Index, Tencent, Baba, Xiaomi, and Meituan shares reduce.

Hope the companies can do better.

The dot plots are kind of redundant. Things can change quickly week to week. But I am still surprised it's a pretty large majority thinking of another rate hike this year. The more effective way to curb inflation is to replace the current POTUS.

The Fed raised rates by 25 bps to 3.75%-4.00%, with a unanimous 12-0 vote — the first hike since 2023. The dot plot shows: 16 of 18 officials expect at least one more rate hike this year.

Chairman Wash cited a strong economy, inflation above target, and Middle East tensions as reasons for the unanimous vote.

The next two Fed meetings before year-end are also expected to discuss rate hikes. Another 25-bps increase cannot be ruled out.

The US stock market has already priced in the expectation of this rate hike, with calm market performance.

Frankly speaking, I did not expect the Fed to raise rates. It feels like Warsh is going against what Trump would have wanted. I think we will see more tensions between them very soon 🫢🫣.

Anyway, some good news closer to home. Enough of rate hike.

Databricks and Anthropic are both investing in Singapore! 🇸🇬 ( today news)

Databricks will invest over US$350 million and double its local headcount. It is also partnering with IMDA to train 20,000 people in industry relevant data and AI skills.

Anthropic will open its Singapore office this October, with the investment amount yet to be disclosed. I believe it going to be big one like openAI.

A 25bp hike to 3.75%-4.00% after three years is late and dangerous. Dots pointing to more tightening while Trump wants 1% creates political pressure. If the Fed overtightens now, it risks breaking credit and triggering a Q4 slowdown.

The dots in the 2027 plot are interesting as there were actually 3 members projecting rate cuts to 3.5%-3.75% and one projecting 3-3.25% (!) in 2027 while the rests opined target range to be either 4.00%-4.25% or 4.25%-4.5%. The accompanying SEP projected PCE inflation to fall from 3.7% at end 2026 to 2.3% by end 2027. Should this happen, the dot plots for the later years projected fed fund rates to move towards the mid 3% range by 2029. 🤔