Fed Signals It Is Not Done Raising Interest Rates: A New Test for Four Big Banks

Federal Reserve Chair Jerome Powell once again stressed that the United States central bank is not yet convinced the benchmark interest rate is high enough to tame inflation. The statement is a strong signal that the Fed may not have ended its rate-hiking cycle, even though the market had hoped the monetary tightening would soon be over. For global investors, the message changes the risk map for financial assets, especially banking shares that have been one of the beneficiaries of rate hikes.

In an analysis published by the CNBC Investing Club, particular attention was given to four bank stocks held in the club's portfolio. The four have very different business models, so their response to interest rate policy is not uniform. Banks that rely on net interest income from consumer and commercial loans are usually helped by high rates, at least in the short term. However, banks with large exposure to long-term bonds and securities portfolios instead face pressure from asset write-downs.

That difference in character explains why the Fed cannot be read as a single variable. Further rate hikes will widen the interest spread for banks that are nimble at managing liabilities, but at the same time raise the cost of funds and the risk of loan defaults if the economy slows. Analysts estimate that banks with a strong deposit base and thick liquidity will be more resilient in the face of a prolonged high-rate scenario than banks that depend on market funding.

For Indonesia, the direction of Fed policy is not merely external news. When expectations for US rates rise, US government bond yields are also pushed higher, so global investors tend to pull funds out of emerging markets. The rupiah could weaken, and Bank Indonesia faces a dilemma between maintaining exchange-rate stability or cutting rates to support growth. The domestic banking sector also needs to watch the rise in the cost of funds if BI's benchmark rate is forced to stay high for longer.

"The market may be too quick to conclude that the Fed will soon loosen policy. Powell's statement shows that inflation data remains the main determinant," said a global market analyst, describing investors' cautious stance toward the direction of US monetary policy.

It should be noted that the four banks in the CNBC Investing Club spotlight do not represent the entire US banking industry. Some banks focus on consumer credit, some operate in the corporate segment, and some have investment business lines. These differences mean investment recommendations cannot be generalized. Investors need to look at each bank's balance sheet structure, asset quality, and risk management strategy before making a decision.

Going forward, the big question is not only whether the Fed will raise rates one more time, but how long high rates will last. If US inflation remains stubborn, pressure on global financial markets could continue, including in Indonesia. Conversely, if economic data slows faster than expected, the Fed may be forced to reverse course. For market participants, this uncertainty demands a more disciplined hedging strategy and more mature portfolio diversification.