Federal Open Market Committee (FOMC)

The market now expects a rate cut pause in January and just two cuts for the whole of next year, down from almost six cuts forecast in early September.

The S&P 500 index fell following the announcement, while US Treasury yields and the Bloomberg Dollar Index rose.

BNY notes that this move has been 91% priced in.

Chew notes that although the STI was on course to make a 17-year high with significant stock market volumes, there has been nostalgia over the bull markets of the 90s and the lead-up to 2007’s peak.

The US Fed slashed rates by 50 basis points, or a half percentage point on Sept 18, the first cut since March 2020.

Mansoor Mohi-uddin, BOS’s chief economist, forecasts two rate cuts this year, in September and December.

The minutes indicated increased optimism among participants about the path of inflation, noting “clear progress.”

OCBC is analyst Jonathan Koh’s top pick due to its commitment to maintaining its 50% dividend payout ratio.

"Real interest would rise considerably next year, which could hurt economic growth and affect financial stability": DBS

Analysts are also anticipating a choppy 3Q2022 ahead, and the US Fed being likely to hike 75 basis points in July.