KUALA LUMPUR (June 20): Maybank Investment Bank Bhd (Maybank IB) saw “hawkish” pivots among ASEAN central banks after the US Federal Reserve (Fed) front-loaded its interest rate hikes and sent the federal funds rate to a higher level than the last interest rate hike cycle’s peak of 2.5%.

In a research note on Monday (June 20), chief analyst Suhaimi Ilias said Fed chairman Jerome Powell also indicated a 50- to 75-basis-point rate hike for the next Federal Open Market Committee meeting on July 26 and 27.

He said Bank Negara Malaysia is expected to increase the overnight policy rate (OPR) by 25 basis points in the next Monetary Policy Committee meeting from July 5 to 6 after the 25-basis-point hike in the May 10 to 11 meeting.

The analyst said there is also the prospect of another 25-basis-point hike by end-2022 to raise the OPR to 2.5% versus the previous view of another 25-basis-point hike later in the second half of 2022 to 2.25%.

“We maintain our forecast of the OPR reaching 3% in 2023,” he said.

He said the Bangko Sentral ng Pilipinas (BSP) also signalled interest rate hikes this month and in August 2022, following the 25-basis-point increase to 2.25% last month, and going “data-dependent” afterwards.

“Our BSP’s policy interest rate forecasts currently are 2.75% this year and 4% next year with upside risk of ‘front-loading’ this year given the above-mentioned signal by BSP on its near-term policy rate trajectory,” it said.

Meanwhile, he said Maybank IB had revised its forecast of Bank of Thailand’s benchmark interest rate, expecting a 50-basis-point hike to 1% by end-2022 and another 50-basis-point increase to 1.5% in 2023 versus a 25-basis-point hike this year and 50-basis-point hike next year previously.