So it's finally official. On Sept 18, 2024, the US Federal Reserve, the central bank of the world's largest economy, announced a 0.5 per cent (50 basis points) cut to its benchmark interest rate. Big deal. You may ask, 'What does a bunch of boomers gathering to talk about monetary policy have anything to do with you and me?' Well,...
PUBLISHED ONSo it's finally official. On Sept 18, 2024, the US Federal Reserve, the central bank of the world's largest economy, announced a 0.5 per cent cut to its benchmark interest rate.
We all like to say that "cash is king" and it's the "best thing to own if interest rates are high". That's a completely normal assumption to make because high interest rates means we can get more moolah for our cash savings. Overall, the US economy are so central to how the world economy functions, that whatever the Fed does with interest rates impacts countries everywhere-including Singapore.
Given Singapore's government has a super safe and strong reputation, owning its T-bills is like holding cash.But interest rates move in cycles and that was also the case with the US Fed.
Why's that the case? Well, basically, the Fed has been telling the market since late 2023 that its interest rate is high enough. If you wanted to change your Singapore dollars into US dollars, you could actually get just over five per cent in a US Dollar MMF. That chart was from late 2023 and it went even higher before the year was out, with the latest data from Fitch Ratings saying that by the end of 2023, there was an incredible US$9.9 trillion in global MMF assets.
However, we're now seeing a reversal of that trend with interest rates starting their slow descent. Indeed, the day after the rate cut by the Fed , the i-Edge S-REIT Index was up 1.7 per cent. Over the past month, the index is up over nine per cent.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Cathay Pacific cancels 22 flights from Sept 5, assures it will resume operations by Sept 7The cancellations include four flights between Singapore and Hong Kong.
Read more »
Today in Pictures, Sept 13, 2024Read more at straitstimes.com.
Read more »
Today in Pictures, Sept 24, 2024Read more at straitstimes.com.
Read more »
Today in Pictures, Sept 27, 2024Read more at straitstimes.com.
Read more »
Today in Pictures, Sept 3, 2024Read more at straitstimes.com.
Read more »
Today in Pictures, Sept 12, 2024Katy Perry performs at the 2024 MTV Video Music Awards, massive fire in California, and more images from around the world in Today in Pictures.
Read more »