High trade tariffs and weak sovereign credit will exert upward pressure on interest rates
[SINGAPORE] Softer interest rates can be a boon for individuals and businesses. For one thing, US President Donald Trump has been pushing the Federal Reserve to lower interest rates more aggressively.
Whoever succeeds incumbent Jerome Powell, whose term as Federal Reserve chairman ends in May 2026, will likely be much more dovish on interest rates.
Cheaper debt helps indebted households as lower debt financing costs will mean higher disposal income. Meanwhile, businesses can invest more and/or enjoy higher profits when borrowing costs reduce.
