Philippine central bank raises interest rate for first time in over two years

The Philippine central bank (BSP) hiked its benchmark interest rate for the first time in over two years. The likelihood of a U.S. Fed rate cut in June 2026 now sits at 4.9% YES, up from 4% a day ago.

Market reaction

The June 2026 market remains bearish on a Fed rate cut, trading at just 4.9% YES. Daily volume is $1,200 in USDC, and it takes $2,864 to shift the odds by five points, making this a thin market. The largest single price move was a 0.9-point increase.

Why it matters

The BSP’s preemptive hike signals that inflation, driven partly by rising oil prices tied to the Middle East conflict, remains a primary concern for central banks. The BSP moving before the Fed suggests inflationary pressure is broad enough that traders are skeptical the Fed will cut in June. The modest uptick in YES odds reflects that skepticism: even with the move upward, the market is pricing a rate cut as very unlikely.

What to watch

The FOMC meets April 28-29. Any statements from Chair Jerome Powell signaling a shift from inflation control toward supporting economic growth would be the main catalyst for movement in this market. At 5¢, a YES share pays 20x, but that return requires a drastic shift in U.S. economic data between now and June 2026.

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