The Federal Reserve raised its benchmark interest rate on Wednesday amid persistent inflation and stronger-than-expected economic growth, prompting renewed criticism from President Trump. However, economists emphasize that broader economic trends matter more than the Fed's actions in determining longer-term borrowing costs like the 10-year Treasury yield, which now hovers around 5 percent. This shift in the economic landscape is influencing investment decisions: with Treasury yields offering modest returns by locking investors into fixed rates, some financial advisors argue that stocks remain attractive alternatives, as companies can grow their businesses and potentially increase profits over time, offering better long-term returns for income-seeking investors.
Daily Digest ·
The Federal Reserve raised its benchmark interest rate on Wednesday amid…
What moved Wall Street and the PSEi, and what it means for your money, in plain language.
Today, in Two Lines
The day’s biggest story in each market.
The Federal Reserve raised its benchmark interest rate on Wednesday amid persistent inflation and stronger-than-expected economic growth, prompting renewed criticism from President Trump.
The Philippine stock market tumbled 1.72% on September 18 as investors grew cautious over mounting inflation pressures and rising government bond yields.
US & PH Markets at Last Close
Where each market finished its most recent trading session before this issue went out.
US markets
| S&P 500 | 7,650.50 +0.17% |
| Dow Jones | 51,682.64 -0.18% |
| Nasdaq | 26,522.54 +0.39% |
| 10-Yr Treasury Yield | 5.00% |
Philippine markets
| PSEi | 5855.91 -1.72% |
| USD/PHP | 62.71 +0.15% |
| BSP Rate | 5.00% |
Winners & Losers
The stocks that moved most, and why.
PHPhilippines
- ICTSI International Container Terminal Services Inc.-3.21%
FTSE Philippines rebalancing-driven institutional portfolio adjustment
Today’s Full Story
USUnited States
PHPhilippines
The Philippine stock market tumbled 1.72% on September 18 as investors grew cautious over mounting inflation pressures and rising government bond yields. The PSEi fell to 5,855.91, with services and conglomerates leading losses. Compounding the weakness, government bond yields climbed significantly, the 10-year yield reached 7.50% by Friday, making government bonds more attractive than equities (a phenomenon where higher bond returns reduce the relative appeal of stocks). Meanwhile, the peso weakened to 62.749 per dollar, hitting a new all-time low despite the Bangko Sentral ng Pilipinas' third consecutive interest rate hike to 5% announced earlier in September. The central bank raised rates to combat inflation, which currently stands at 6.1% for August and remains well above its 2-4% target. The BSP also revised its 2027 inflation forecast upward to 5.4% from 4.5%, citing risks from severe El Niño weather and higher minimum wages. These rate increases mirror actions by the U.S. Federal Reserve, which also hiked by 25 basis points (the amount interest rates rise) on September 16 to 3.75%-4%, creating a narrowing spread between the two currencies and adding pressure on the Philippine peso.
USD/PHP
Biggest mover: Russell 2000 -0.50%
What to Watch
- US Treasury yields near 5% may pressure global bond markets; watch for Fed guidance signaling future rate path adjustments.
- Philippine government bond yields at 7.50% create arbitrage opportunity; monitor whether equity inflows resume or bond demand persists.
- BSP's upward 2027 inflation forecast revision signals persistent price pressures; watch for data on El Niño impact and wage pressures.
- Peso weakness to new all-time lows warrants monitoring of capital flows and investor sentiment toward Philippine assets amid rate hike cycle.
Sources
The original reporting behind this issue.
US markets
- Federal Reserve rate hike reflects new world of sticky inflation and faster growth
- Even with 10-Year Treasury Yields Around 5%, I'd Still Rather Buy This S&P 500 Dividend Stock for Passive Income in September
PH markets
Terms to know
- Stock
- A tiny piece of ownership in a company. Buying a company's stock means you own a small part of that business.
- Stock market
- The overall marketplace where stocks are bought and sold. When we say 'the market' or show numbers like the S&P 500 or PSEi, we mean a snapshot of how stocks overall are doing that day.
- Interest rate
- The cost of borrowing money, or what you earn for saving it. When rates go up, loans get pricier, but savings can earn a bit more.
- Inflation (CPI)
- When everyday prices rise over time, so the same money buys less than before. CPI is the number used to measure it.
- Fed (Federal Reserve)
- The US central bank. It sets interest rates, which affect how expensive it is to borrow money, even here in the Philippines.
- BSP (Bangko Sentral ng Pilipinas)
- The Philippine central bank, PH's equivalent of the Fed.
- PSEi
- A single number that tracks how the Philippines' biggest company stocks are doing overall, like a report card for the PH stock market.
- bps (basis points)
- A small unit for measuring interest rate changes: 100 bps = 1%. Used because rate changes are usually tiny.
- 10-Yr Yield
- The interest rate the US government pays to borrow money long-term. When it rises, loans and mortgages tend to get pricier everywhere, not just in the US.
- USD/PHP
- How many pesos it takes to buy one US dollar.
- OFW remittances
- Money sent home by overseas Filipino workers, a key driver of peso demand.
Summaries, mover explanations, and forward-looking notes in this issue are AI-written from real market data and sourced news. Not financial advice.