{"id":6793,"date":"2026-08-18T11:00:00","date_gmt":"2026-08-18T04:00:00","guid":{"rendered":"https:\/\/brokerth.com\/?p=6793"},"modified":"2026-08-18T11:00:00","modified_gmt":"2026-08-18T04:00:00","slug":"jpmorgan-fed-december-hike-thai-carry-trade-2026-en","status":"publish","type":"post","link":"https:\/\/brokerth.com\/en\/jpmorgan-fed-december-hike-thai-carry-trade-2026-en\/","title":{"rendered":"JP Morgan Calls December Fed Hike: Thai Carry Trade Math in August 2026"},"content":{"rendered":"<p>For months the narrative around the US Federal Reserve was about when rate cuts would arrive. That story is over. JP Morgan&#8217;s global research team now puts the Fed&#8217;s first rate move at December 2026 \u2014 and it is a 25 basis-point hike, not a cut, taking the funds rate to 3.75\u20134.00 percent. With three FOMC members dissenting in favor of higher rates at recent meetings, the direction of travel for US monetary policy has reversed. Thai investors positioned for a dovish Fed are sitting on the wrong side of the trade.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_86 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/brokerth.com\/en\/jpmorgan-fed-december-hike-thai-carry-trade-2026-en\/#The_FOMC_Arithmetic\" >The FOMC Arithmetic<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/brokerth.com\/en\/jpmorgan-fed-december-hike-thai-carry-trade-2026-en\/#What_a_December_Hike_Does_to_Thai_Carry_Trades\" >What a December Hike Does to Thai Carry Trades<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/brokerth.com\/en\/jpmorgan-fed-december-hike-thai-carry-trade-2026-en\/#What_This_Means_for_Thai_Investors\" >What This Means for Thai Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/brokerth.com\/en\/jpmorgan-fed-december-hike-thai-carry-trade-2026-en\/#The_BoTs_Difficult_Position\" >The BoT&#8217;s Difficult Position<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/brokerth.com\/en\/jpmorgan-fed-december-hike-thai-carry-trade-2026-en\/#Key_Dates_to_Watch\" >Key Dates to Watch<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"The_FOMC_Arithmetic\"><\/span>The FOMC Arithmetic<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Federal Open Market Committee has held at 3.50\u20133.75 percent through five consecutive meetings. Three dissenting votes at the most recent gathering \u2014 all calling for an immediate 25 basis-point increase \u2014 represent a significant minority. When FOMC dissenters number three or more in a single meeting, the committee has historically acted within two subsequent meetings. That puts a hike squarely on the table for October or December 2026.<\/p>\n<p>JP Morgan&#8217;s base case lands on December because US CPI for July came in at 3.4 percent \u2014 above target but decelerating. A hot August reading would accelerate the timeline. Either way, the market is no longer pricing rate cuts. It is pricing hikes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_a_December_Hike_Does_to_Thai_Carry_Trades\"><\/span>What a December Hike Does to Thai Carry Trades<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The carry trade \u2014 borrowing in low-yield baht to deploy in higher-yield dollar assets \u2014 is already profitable at the current 275 basis-point rate gap. A December hike to 3.75\u20134.00 percent widens that gap to 300 basis points if the Bank of Thailand holds at 1 percent, as expected at its August 26 meeting.<\/p>\n<p>An extra 25 basis points sounds modest, but the psychological effect is outsized. It signals the Fed&#8217;s trajectory is upward, not flat, which sustains dollar demand against virtually every emerging market currency including the baht. Carry traders do not unwind positions in a hiking cycle \u2014 they add to them. Any strategy that depends on a weaker dollar or a stronger baht over the next six months is fighting the policy tide.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_This_Means_for_Thai_Investors\"><\/span>What This Means for Thai Investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Thai investors holding US equity ETFs \u2014 SCBSP500, KFSDML, B-SP500 and similar products \u2014 get a tailwind from this scenario. A firmer dollar and rising US rates historically correlate with US equity outperformance relative to emerging markets, even if the relationship is not mechanical in every quarter.<\/p>\n<p>Thai bond funds face the opposite pressure. Domestic yields at 1 percent look thin against a world where the Fed could reach 4 percent. Foreign capital will not flow meaningfully into Thai fixed income in this environment. The opportunity cost for current Thai bond fund holders is real, even if mark-to-market losses are limited.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_BoTs_Difficult_Position\"><\/span>The BoT&#8217;s Difficult Position<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Bank of Thailand is caught between two pressures. Raising rates to defend the baht would squeeze an already sluggish domestic economy. Holding rates lets the baht drift weaker, importing inflation via higher energy and food costs \u2014 Thailand buys the majority of its oil at prices now above $80 per barrel, with Brent above $86. Most analysts expect BoT to hold through year-end, which means the Fed-BoT gap widens further after December.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Dates_to_Watch\"><\/span>Key Dates to Watch<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>August 26:<\/strong> BoT rate decision \u2014 expected hold at 1.00%<\/li>\n<li><strong>September:<\/strong> US CPI print that will define October vs December hike debate<\/li>\n<li><strong>October FOMC:<\/strong> Possible surprise hike if dissenter pattern holds<\/li>\n<li><strong>December FOMC:<\/strong> JP Morgan&#8217;s base case for 25 bps to 3.75\u20134.00%<\/li>\n<\/ul>\n<p>The carry trade has not broken \u2014 it has strengthened. Thai investors waiting for dollar weakness to rotate back into baht assets may be waiting considerably longer than they planned going into 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>JP Morgan forecasts the Fed&#8217;s first move in December 2026 \u2014 a 25 bps hike to 3.75-4.00%. With three FOMC dissenters already on record, the rate cycle has flipped.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","footnotes":""},"categories":[32],"tags":[],"offerexpiration":[],"class_list":["post-6793","post","type-post","status-publish","format-standard","hentry","category-forex"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>JP Morgan Dec 2026 Fed Hike: Impact on Thai Carry Trades<\/title>\n<meta name=\"description\" content=\"JP Morgan forecasts the Fed&#039;s first move in December 2026 \u2014 a 25 bps hike to 3.75-4.00%. 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