Phillip Securities expects the Fed to raise rates by 0.25% to 3.75-4.00% at this week's meeting

MacroDigital Finance
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Summary · why it matters

Phillip Securities said its research team expects this week's Fed meeting to raise interest rates by 0.25%, seeing the Fed likely lifting its policy rate by 25 basis points to 3.75-4.00% at the FOMC meeting on September 15-16, 2026. This is in line with the FedWatch Tool, which assigns roughly a 90% probability to a hike at the September 2026 meeting, as the August Core CPI inflation reading accelerated by 0.3% month-on-month, above the market's 0.2% forecast, while the year-on-year figure stood at 2.4%, matching expectations and still above the Fed's 2% target. The research team believes most Fed officials will raise rates to avoid repeating the policy lag of 2021-2022 and to build credibility that the central bank has a clear goal of managing inflation, which would lower future inflation expectations and slow the acceleration in bond yields. The Fed Chair views current employment as still strong and the economy as able to support a rate hike. What must be watched is the stance and rate outlook of Fed officials through the Dot Plot and how it changes. If rates are raised only once, the research team believes the market has already priced in part of it, but if there is a tendency toward more than one hike, the market could face selling pressure because a higher discount rate would pressure equity valuations, especially for high-growth stocks. The research team recommends investing in large US bank stocks that benefit from rising rates, namely JPM, BAC and C, and diversifying into Value play groups.

Impact on stocks 3

Digital Finance & Tokenization▲ · 2 stocks
Citigroup Inc.
C
▲ PositiveMonetaryrelevance

Citigroup is explicitly named among large US bank stocks recommended to benefit from rising rates ahead of the expected Fed hike.

JPMorgan Chase & Co
JPM
▲ PositiveMonetaryrelevance

JPMorgan is explicitly named among large US bank stocks recommended to benefit from rising rates ahead of the expected Fed hike.

Financials▲ · 1 stocks
Bank of America Corp
BAC
▲ PositiveMonetaryrelevance

Phillip Securities recommends large US bank stocks like BAC that benefit from rising rates as the Fed is expected to hike 25bp.

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