FINWIRES · TerminalLIVE
FINWIRES

Fed Rate Hike Could Come as Early as September, Macquarie Says

By
Fed Rate Hike Could Come as Early as September, Macquarie Says

The Federal Reserve could raise interest rates as soon as September amid growing support within the rate-setting committee for policy tightening, Macquarie Group said in a note e-mailed Thursday.

Ahead of the Fed's decision to hold rates steady on Wednesday, the firm expected the central bank to deliver a hike in December.

But after three regional presidents dissented in favor of higher interest rates at the most recent meeting, Macquarie said there was a possibility the Fed could move as early as September.

"Our baseline remains that a Fed rate hike lies ahead (in December)," said David Doyle, head of economics at Macquarie. "Risks to this are titled towards earlier timing, with September or October also possible."

The dissenting votes came from Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas. All three preferred to raise interest rates by a quarter percentage point, the Federal Open Market Committee said Wednesday.

"Should the labor market show further improvement (as we anticipate) and core inflation measures remain above 2%, there will likely be more FOMC voters advocating for a rate hike in the months ahead," Doyle said.

US inflation, as measured by the personal consumption expenditures price index, dipped last month for the first time in more than six years, as lower energy prices offered a brief consumer reprieve before renewed Middle East hostilities sent oil costs higher again.

Fed Chair Kevin Warsh on Wednesday reiterated that the central bank will deliver price stability.

"The path to central bank heaven requires delivering on our remit," Warsh said during his post-meeting press conference. "These days that means delivering on price stability."

The probability of the US central bank raising its benchmark lending rate by a quarter percentage point in September moved to 65% on Thursday from 57% Wednesday, according to the CME FedWatch tool.

"If an institution that usually strives for consensus can produce three dissenters in favor of hawkish action, we suspect that (there) are many more (perhaps a majority) that would have a tightening bias, if allowed to speak individually," Thierry Wizman, global foreign exchange and rates strategist at Macquarie, said in a separate note.

Related Articles

Samsung's Second-Quarter Profit Surges 14-Fold as Revenue Soars 130% on AI Boom
US Markets

Samsung's Second-Quarter Profit Surges 14-Fold as Revenue Soars 130% on AI Boom

Samsung Electronics (KRX:005930) reported a 1,344% year-over-year surge in attributable net profit in the second quarter as revenue more than doubled, owing to strong demand for its memory products amid the artificial intelligence boom.Net profit attributable to shareholders jumped 14-fold in the second quarter to 71.27 trillion won from 4.934 trillion won a year earlier, according to a filing with South Korea's Financial Supervisory Service on Thursday.Earnings per share for both common and preferred shares rose 52% to 10,849 won, according to a separate press release the same day.The South Korean tech company posted a 130% year-over-year jump in revenue to 171.5 trillion won from 74.57 trillion won a year prior.Operating profit skyrocketed 1,814% to 89.5 trillion won from 4.68 trillion won.Samsung said the results were primarily driven by its Device Solutions (DS) unit, which posted a 57% quarter-over-quarter increase in sales as its Memory Business set an all-time high for quarterly revenue and operating profit."The Memory Business achieved another record-breaking quarter by proactively addressing AI demand despite limited capacity with a primary focus on server products. The continued industry-wide upward trend of prices also contributed to the record earnings," Samsung said.The Device eXperience (DX) division, which covers its consumer-facing products like smartphones, TVs and appliances, posted a 9% quarterly drop in sales due to higher component costs.The company expects rising material costs and soft consumer demand to persist in the second half. However, for the same period, Samsung expects "double-digit revenue growth" amid rising demand for its chips from customers in the US and China.The company plans to ramp up production of new mobile products based on the second-generation 2nm process in the second half.Samsung's shares are down more than 1% in early-morning trade in Seoul Thursday.

KRX:005930
Adani Enterprises Swings to Quarterly Net Loss on $275 Million US Settlement
US Markets

Adani Enterprises Swings to Quarterly Net Loss on $275 Million US Settlement

Adani Enterprises (NSE:ADANIENT, BOM:512599) swung to an attributable net loss in the fiscal first quarter, which executives attributed to a one-time settlement charge linked to the US Office of Foreign Assets Control (OFAC).Net loss attributable to shareholders stood at 11.6 billion rupees from a net profit of 8.85 billion rupees a year earlier, according to an Indian bourse filing on Wednesday.Loss per share was 8.91 rupees for the quarter ended June 30, swinging from earnings per share of 7.12 rupees last year.The flagship unit of Indian multinational conglomerate Adani Group attributed the loss to the $275 million OFAC settlement recorded during the quarter. In May, the company agreed to settle its potential civil liability for 32 violations of OFAC's Iran sanctions.Excluding this impact, Adani Enterprises' profit before tax declined 12% to 12.95 billion rupees from 14.66 billion rupees.The company posted a 50% jump in revenue from operations to 329.2 billion rupees from 219.6 billion rupees a year earlier."This is primarily driven by a reset that is happening in the business as our copper smelter is coming online," Adani Enterprises CFO Robbie Singh told analysts during an earnings call.Singh added that the company's investments are "now progressively moving from build-out phase to value realization phase," with a clear pathway for its diversified portfolio assets, led by Adani Airports and Adani Roads, according to a transcript of the call published by Investing.com.Adani Airports posted a 39% year-over-year increase in total income to 37.6 billion rupees, while the segment reported a pre-tax loss of 1.94 billion rupees from a pre-tax profit of 2.04 billion rupees a year prior amid expansion.On the company's data center business, Singh said the company has signed a new contract for 400 megawatts of capacity over the next 2.5 years, taking its total signed capacity to about 1 gigawatt.When asked by an analyst about whether the new order was from the same customer, Singh said, "We can't really add anything more to this because we already publicly shared with you this is part of the Google contract advisory."In October 2025, Adani Enterprises, through AdaniConneX, and Google disclosed plans to build India's "largest" data center campus in Andhra Pradesh.

BOM:512599NSE:ADANIENT
Microsoft's Fourth-Quarter Results Beat Estimates as Azure Revenue Rallies 43%
US Markets

Microsoft's Fourth-Quarter Results Beat Estimates as Azure Revenue Rallies 43%

Microsoft's (MSFT) fiscal fourth-quarter results topped Wall Street's expectations, driven by a revenue surge in cloud computing platform Azure.For the three months ended June 30, adjusted earnings per share increased to $4.74 from $3.86, higher than the consensus on FactSet for $4.24. Revenue rose 18% to $90.01 billion, exceeding the Street's $87.62 billion view.The intelligent cloud segment's revenue soared 32% to $39.31 billion, buoyed by 43% growth in Azure and other cloud services, Microsoft said. Analysts expected a 40% year-over-year advance in Azure sales.Sales for the productivity and business processes segment grew 14% to $37.85 billion in the fourth quarter, driven by gains in 365 commercial and consumer cloud businesses as well as LinkedIn."This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their (artificial intelligence) transformation," Chief Executive Satya Nadella said in a statement.Shares of Microsoft were up 3.2% in after-hours trading, but had fallen 19% this year through Wednesday close.Morgan Stanley sees Azure and Copilot as key catalysts for Microsoft's stock. Both platforms are "set to inflect," but the market is yet to fully price in the timing and magnitude of that inflection, the brokerage said in a note last week."Channel partners sounded positive on (calendar second-quarter) Azure results and the forward outlook," Morgan Stanley analysts wrote. "Our latest partner conversations continue to point to durable demand across Microsoft's commercial portfolio, with Azure, Microsoft 365, security and broader AI workloads remaining the primary growth drivers."Revenue for Microsoft's more personal computing unit fell 4% annually in the fourth quarter, driven by declines in Xbox and Windows.Microsoft said in April that it expected capital expenditures of about $190 billion for the 2026 calendar year."We believe consensus (fiscal 2027) capex estimates remain conservative relative to Microsoft's long-term AI infrastructure buildout and could move higher (mostly in the second half of fiscal 2027)," Morgan Stanley said.Alphabet's (GOOG, GOOGL) second-quarter capex doubled year over year at $44.92 billion. The technology giant raised its 2026 capex outlook to between $195 billion and $205 billion from its previous range of $180 billion to $190 billion.

$MSFT