US Rate Hike Threatens to Raise Borrowing Costs in Singapore

The US Federal Reserve has increased its benchmark interest rate to between 3.75 and 4 per cent, a move that could have implications for Singapore.

After months of hoping inflation would ease on its own, the Fed raised its benchmark interest rate by a quarter point on September 17 in an effort to rein in rising prices.

The latest projections suggest that US inflation will remain above its 2 per cent target in 2026, which could mean the country keeps its monetary policy tight for the foreseeable future and even raises rates further.