SINGAPORE (Jan 22): Homeowners with mortgages may have noticed the rising mortgage rates. The Singapore Interbank Offered Rate has been rising for the past three months. On Jan 13, at a recent analyst day by UOB Kay Hian, Jonathan Koh, its banking analyst, hammered home the point that quantitative easing had ended and the US Federal Reserve was on the path of quantitative tightening. QT started on Oct 17 last year.

The European Central Bank has scaled down its net asset purchases from €60 billion ($97 billion) to €30 billion starting Jan 18. Japan has recorded seven consecutive quarters of growth. Does the Bank of Japan need to continue with QE? Koh asks. The People’s Bank of China has regularly drained liquidity through open-market operations, resulting in a rise in the Shanghai Interbank Offered Rate.

Since December 2016, the US federal funds rate has been raised four times, from 0.25% to 1.5% as at December 2017. “The median projected path for the Fed funds rate is 2.1% at end-2018, 2.7% at end-2019 and 3.1% at end-2020,” says Koh. This implies three rate hikes in 2018 and two hikes each in 2019 and 2020.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook