SET Index Plunges 1.5% as Investors Assess Fed’s Firm Signal on Rate Hike

The Thai stock market plunged 1.5% in the morning session on Thursday to 1,618.44 points after the Federal Reserve on Wednesday made what investors believed was the clearest signal that the central bank could start raising policy rates as soon as March.

“With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” said the Fed.

The hike from easy monetary in 2020 will be the first rate hike in three years for the U.S.

“I think there’s quite a bit of room to raise interest rates without threatening the labor market”.


Mr. Koraphat Vorachet, Capital Nomura Securities’ strategist, through “Kaohoon Jor Talad Program” on January 27, 2022, stated that the Fed’s statement last night was not any different than what the market had expected, but the tone and statement from Jerome Powell, Fed’s Chairman, concerns investors of QE tightening that could come as soon as June after the rate hike in March and the Fed’s meeting in May.

Phillip Securities (Thailand) stated that the Thai stock market that edged lower in today’s session was due to the negative sentiment from the contraction of Dow Jones Futures, coupled with a plummet in major stock markets in Asia, such as Japan and Hong Kong. Moreover, the Fed was still not clear about cutting the balance sheet.


As of 11:44 local time in Thailand, Nikkei fell 2.96%, SSEC slipped 0.88%, Hang Seng Index plunged 2.57%, ASX 200 plummeted 1.93% and IDX Composite dipped 0.18%.