To The Moon

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📈 1. The Fed Has Raised Rates — Why Does It Matter?

As a beginner investor, I always want to understand what happens underneath the headline when the Federal Reserve changes interest rates.

On 16 September 2026, the US Federal Reserve raised the federal funds target range by 25 basis points, from 3.50%–3.75% to 3.75%–4.00%. The Fed said inflation remained elevated and that the decision was intended to support a more timely return toward its 2% inflation goal.

For me, this creates an interesting catalyst to watch for financial companies because higher interest rates can affect bank loans, loan yields, deposits, net interest margins, insurance investments and future investment returns.

But I also remind myself:

🧠 Higher interest rates do not automatically mean financial stocks will rise. The benefit depends on how the companies’ revenues, funding costs, credit quality and investment portfolios respond.

That is why I want to look at three companies: OCBC, Prudential and Manulife.

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🏦 2. Why Higher Rates Can Be a Catalyst for Banks

The easiest way for me to understand the banking effect is through a simple example.

Imagine I am a bank.

I lend a customer $100,000 at 5% interest.

I potentially receive:

💰 $5,000 interest income per year.

Now suppose market interest rates rise and the bank can reprice the loan to 6%.

The same $100,000 loan could potentially generate:

💰 $6,000 interest income.

That is an additional $1,000 of annual interest income, before considering funding costs and other factors.

This is why rising interest rates can potentially be positive for banks.

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💰 3. The Important Number: Net Interest Margin

The number I would watch as a beginner is NIM — net interest margin.

NIM basically measures the spread between what a bank earns on interest-generating assets and what it pays for its funding, relative to those assets.

So my simplified formula is:

🏦 Higher loan yields − 💰 funding costs = potential NIM benefit

If loan rates increase faster than deposit costs, the bank can potentially earn a wider spread.

But if deposit rates rise just as quickly, the benefit can disappear.

Therefore, I don’t simply say:

Fed raises rates = banks automatically make more money.

Instead, I ask:

📊 Are loan yields increasing faster than the bank’s funding costs?

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🚀 4. Another Catalyst: Bank Loans Can Increase

This is the important point I wanted to add.

A higher-rate environment can also affect loan demand and loan balances.

If economic activity remains strong, companies may borrow money to:

🏭 Build factories

🏢 Expand offices

🤖 Invest in technology

🚢 Finance inventory

🌏 Expand overseas

🏠 Purchase property

Consumers may also borrow for:

🏠 Mortgages

🚗 Cars

💳 Credit facilities

🎓 Education

🏡 Renovation

If the bank’s loan book grows, the bank has more interest-earning assets.

So there can potentially be two catalysts:

Catalyst 1️⃣ — Higher yield per loan

Interest rates increase → loan rates can reprice higher → potential increase in interest income.

Catalyst 2️⃣ — More loans

Loan demand increases → loan balances grow → more interest-earning assets.

That is why I look at both loan growth and NIM.

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🏦 5. OCBC — The Banking Catalyst

OCBC is the clearest example of the banking side of this discussion.

In 1H2026, OCBC’s customer loans reached S$364 billion, up 11% year-on-year. Customer deposits increased 13% to S$459 billion.

This is important to me because it shows that OCBC already has a large and growing lending business.

If interest rates rise and loan yields reprice higher, the potential earnings effect can be significant because even a small change in yield applied across a large loan portfolio can affect interest income.

But I need to watch the other side of the equation.

OCBC’s 1H2026 NIM was 1.73%, down 25 basis points year-on-year because the company was operating in a lower-rate environment. Net interest income declined 3% to S$4.49 billion.

This gives me a very useful lesson:

📉 Falling rates can compress NIM.

Therefore, if the rate environment reverses and loan yields begin rising faster than funding costs, NIM could potentially stabilise or improve.

That is the catalyst I would monitor.

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📊 6. OCBC Fundamental Analysis

OCBC’s 1H2026 net profit was a record S$4.19 billion, up 13% year-on-year.

Total income increased 11% to S$8.00 billion.

The bank also reported a healthy 0.9% NPL ratio and annualised ROE of 13.7%.

What I like to see from a fundamental perspective is that OCBC does not depend only on interest income.

Its non-interest income increased 36% to S$3.51 billion.

Wealth-management income increased 27% to S$3.29 billion, while banking wealth-management AUM reached S$350 billion.

So my OCBC thesis becomes:

🏦 Loan growth

➕ Potentially better loan yields

➕ Potential NIM stabilisation

➕ Wealth management

➕ Insurance income

➕ Trading and fee income

These are different earnings engines.

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📈 7. OCBC Technical Analysis

For TA, I don’t want to buy a bank simply because the Fed has raised rates.

I want to see whether the share price confirms the fundamental story.

My beginner checklist is:

📊 20-day moving average — short-term trend

📊 50-day moving average — medium-term trend

📊 Volume — whether buyers are participating

📊 RSI — momentum

📊 Support — where buyers previously appeared

📊 Resistance — where sellers previously appeared

If OCBC begins making higher highs and higher lows, while volume increases, I would regard that as technical confirmation that market momentum is strengthening.

If the price falls despite the rate catalyst, I would investigate why rather than simply assuming the market is wrong.

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🛡️ 8. Why Higher Rates Can Also Matter to Insurance Companies

Now I move to Prudential and Manulife.

Insurance companies are different from banks.

An insurer collects premiums and invests money to help meet future claims and policy obligations.

That means interest rates can influence the investment side of the business.

Imagine an insurer receives money and invests it in bonds.

Previously:

Bond yield = 3%

Later:

New bond yield = 5%

As existing investments mature and the insurer reinvests the proceeds, it may be able to invest at higher yields.

Over time, this can potentially improve investment income and the economics of some insurance products.

But there is an important warning:

⚠️ Rising rates can also reduce the market value of existing bonds and affect insurance liabilities and accounting results.

Therefore, the relationship between interest rates and insurers is more complicated than the relationship between rates and a simple bank loan.

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🌏 9. Prudential — Why Higher Rates Could Be a Catalyst

Prudential is a major Asian-focused insurance and savings business.

Its 1H2026 results showed:

📈 New business profit: US$1.384 billion, +8%

📈 Operating free surplus generated: US$1.791 billion, +15%

📈 Adjusted operating profit before tax: US$1.812 billion, +9%

📈 Adjusted EPS: 58.4 cents, +17%

Its free-surplus ratio was 209%.

These numbers tell me that Prudential already has strong operating momentum.

The interest-rate catalyst is therefore only one part of the story.

Higher rates can potentially help insurers when new investments can be made at more attractive yields.

At the same time, Prudential’s growth depends heavily on new insurance business, product mix, distribution and Asian customer demand.

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💎 10. Prudential’s Asian Growth Catalyst

One reason I find Prudential interesting is its exposure to Asian insurance markets.

In 1H2026, Prudential reported strong performance across several markets, while ASEAN new business profit grew 13%.

The company also increased its ownership of its Malaysian conventional insurance business to 70% and agreed to acquire a 75% controlling stake in Bharti Life in India.

So I can think about Prudential’s catalysts in several layers:

💰 Higher investment yields

🌏 Asian insurance growth

🛡️ Health and protection demand

📈 New business profit

🏦 Asset-management growth

💵 Capital generation

The Fed rate increase is therefore a macro catalyst, rather than the entire investment thesis.

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📊 11. Prudential TA

For Prudential, I would use the same TA framework.

I would watch:

📈 20-day moving average

📈 50-day moving average

📈 200-day moving average

📊 Volume

📉 RSI

🔵 Previous resistance

🟢 Previous support

If the share price breaks above a major resistance level with increasing volume, I would investigate whether the move is supported by improving fundamentals.

If it breaks support, I would reassess.

The important lesson is:

📚 FA explains why the business could benefit. TA tells me whether investors are actually buying the shares.

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🇨🇦 12. Manulife — Another Insurance + Wealth Catalyst

Manulife gives me another example because it combines insurance and wealth-management businesses.

In Q2 2026, Manulife reported:

💰 Net income attributable to shareholders: C$2.11 billion, +17%

📈 Core earnings: C$1.923 billion, +12%

📈 Core EPS: C$1.09, +16%

📈 Core ROE: 16.3%

📈 New business CSM: C$1.024 billion, +16%.

These figures show why I should not analyse Manulife simply by looking at interest rates.

The underlying insurance and wealth businesses matter too.

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💵 13. Why Higher Rates Can Matter to Manulife

For an insurance company such as Manulife, higher interest rates can potentially improve the yields available when it invests new money.

This becomes especially relevant because insurance companies manage long-duration assets and liabilities.

But I have to remember the other side.

Existing bonds can fall in market value when interest rates rise.

Therefore:

Higher rates = potentially higher future reinvestment yields

but also:

Higher rates = potential mark-to-market pressure on existing fixed-income assets

The actual financial impact depends on the company’s asset-liability management, accounting treatment, duration and business mix.

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📈 14. Manulife TA

For Manulife, I would again combine the fundamental catalyst with price action.

My checklist:

🟢 Price above 50-day moving average

🟢 50-day moving average above 200-day moving average

📈 Higher highs and higher lows

📊 Increasing volume during breakouts

📉 RSI not showing excessive weakness

If these signals align with improving earnings and a supportive interest-rate environment, I would have a clearer framework for analysing the stock.

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🔥 15. The Three Companies — One Rate Catalyst, Three Different Effects

This is the most important beginner lesson.

Company Main Rate Catalyst Other Things I Watch

🏦 OCBC Higher loan yields + potential NIM improvement Loan growth, deposits, NPLs, wealth

🛡️ Prudential Potentially higher investment/reinvestment yields New business profit, Asian growth, capital

🛡️ Manulife Potentially higher reinvestment yields Core earnings, ROE, insurance and wealth

So although all three are financial companies, the Fed’s rate increase affects them differently.

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🚀 16. My Simple Fed-to-Stock Catalyst Chain

This is how I would explain the entire idea to a beginner:

🇺🇸 Fed raises rates

⬇️

💵 Market interest rates increase

⬇️

🏦 Banks can potentially reprice loans at higher rates

⬇️

💰 Interest income per loan can potentially increase

⬇️

📈 If loan balances also grow, interest-earning assets increase

⬇️

🏦 NIM may potentially improve if funding costs rise more slowly

⬇️

💵 Bank earnings could benefit

For insurers:

🇺🇸 Fed raises rates

⬇️

📈 Bond and other new investment yields can become more attractive

⬇️

💰 New money can potentially be reinvested at higher yields

⬇️

🛡️ Investment economics can potentially improve over time

⬇️

📈 Insurance-company earnings/capital generation may benefit

But at every stage, I remind myself:

There are offsets and risks.

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⚠️ 17. What Could Go Wrong?

I don’t want to turn a rate increase into a guaranteed bullish story.

For OCBC, the risks include:

📉 Deposit costs rising

📉 Loan demand weakening

📉 Credit losses increasing

📉 NIM failing to improve

📉 Economic slowdown

For Prudential and Manulife:

📉 Existing bond valuations can fall

📉 Market volatility can affect investment results

📉 Insurance claims can increase

📉 Currency movements can affect reported results

📉 Regulation can change product economics

So the catalyst is conditional.

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🐶 18. My Beginner Options Puppy Summary

My simple way of thinking about the September 2026 Fed hike is:

🇺🇸 Fed raises rates to 3.75%–4.00% → higher market rates → potential higher loan yields for banks → potential higher interest income → possible NIM support.

For OCBC, I especially watch loan growth + NIM + funding costs.

OCBC already had customer loans of S$364 billion in June 2026, up 11% year-on-year, while its NPL ratio remained at 0.9%.

For Prudential, I watch new business profit + investment economics + Asian growth + capital generation.

Prudential’s 1H2026 new business profit rose 8% to US$1.384 billion, while operating free surplus generated rose 15%.

For Manulife, I watch core earnings + ROE + new business + investment and wealth-management performance.

Manulife’s Q2 2026 core earnings rose 12% and core ROE reached 16.3%.

So my beginner formula is:

🧠 Fed rate hike

➕ Higher potential loan yields

➕ Potential loan growth

➕ Potential NIM improvement

➕ Higher potential reinvestment yields for insurers

➕ Strong company fundamentals

➕ Positive technical confirmation

= 📈 A catalyst worth watching

But I would not confuse a catalyst with a guaranteed share-price increase.

The next numbers I would watch are therefore OCBC’s NIM and loan growth, Prudential’s new business profit and investment performance, and Manulife’s core earnings and ROE.

That is how I would combine macro + FA + TA instead of simply saying, “The Fed raised rates, so financial stocks must go up.”

$OCBC Bank(O39.SI)$  

$Manulife(MFC)$  

$Prudential(PRU)$  

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