<p><strong>GLOBAL: Several US Federal Reserve (Fed) policymakers are advocating for rate hikes, signaling unease over sticky inflation. Officials also said the current policy stance is not cooling the economy.</strong></p>

<p><strong>Market impact: </strong>US Treasury yields advanced following economic data reinforcing rate hike expectations. Equities closed higher, bolstered by Nvidia's strong revenue guidance.</p>

<p>Metrobank projects the Fed to keep its policy rate steady in 2026, as it assesses elevated inflation and stable economic growth.</p>

<p><strong>LOCAL: The Bangko Sentral ng Pilipinas (BSP) raised its policy rate by 25 basis points in its August meeting, its third consecutive rate hike for the year. This is due to heightened inflation risks such as El Niño.</strong></p>

<p><strong>Market impact: </strong>The PSEi dropped to the 6,000 level after the BSP raised rates, while the peso weakened to a record 61.888 per US dollar on near-term inflation risks.</p>

<p>Despite the BSP's less hawkish stance in the latest meeting, another rate hike may not be out of the table given key upside risks to inflation that may largely manifest in the last quarter of the year.</p>