Market Highlight 17.09.2026

The Federal Reserve (FED) raised interest rates on Wednesday for the first time in 3 years, increasing the policy rate by 0,25% to a range of 3,75% - 4%. According to the latest projections, 16 of the 18 participants at the meeting expect at least one more rate hike this year, which would bring the policy rate above 4%. Only 4 members expect the rate to be lower than this level by the end of next year. Shortly after taking office in May, FED Chair Kevin Warsh pledged to bring an end to inflation remaining above the Central Bank’s 2% target for a sixth consecutive year, and he has now followed through with a rate hike. The war in Iran has pushed energy prices higher, while the AI investment boom has supported stronger capital spending and economic recovery, making the FED’s inflation-control task more difficult.

The FED’s benchmark rate has the most direct impact on short-term borrowing costs such as credit cards and new auto loans. The 30-year mortgage rate in the U.S rose to nearly 7% last week, the highest level in almost a year. Higher interest rates will not create additional crude oil supply or slow the construction of AI data centers, which are largely insensitive to borrowing costs because capital has already been committed and expected returns far exceed the impact of a 0,25% change in interest rates. What higher rates can do is slow overall economic growth enough to ease pressure on supply. The USD Index rose sharply by 0,73% yesterday as the market assessed that the FED had begun a new monetary tightening cycle that could bring the policy rate to 4,5% in 2027.

Domestically, interbank USD/VND closed Thursday at 26.000, up by around VND 20 on the day. The SBV continued to raise the central rate by a further VND 9, lifting the effective daily ceiling to 26.907.

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