US credit rating downgrade triggers chain reaction to economic outlook; Singapore banks warn of three key impacts.

金融界2025-05-19

In his latest research report, Mansoor Muhiuddin, chief economist at Bank of Singapore, pointed out that Friday's credit rating downgrade by the United States has a wide-ranging impact on its economic outlook. The economist emphasized three core points:

First, "the deteriorating fiscal situation in the United States has reinforced our judgment that long-term U.S. Treasury yields will gradually rise." The bank maintained its forecast that the 10-year US Treasury yield would reach 5.00% within the next 12 months.

Secondly, the challenges facing the safe-haven asset status of the US Treasury Bond highlight the bank's core judgment that "the US dollar exchange rate has peaked".

Third, economists added that huge fiscal deficits and inflationary pressures could force the Federal Reserve to maintain a high-interest-rate policy for an extended period. Current data shows that the 10-year U.S. Treasury yield rose 7 basis points to 4.5107%.

Editor: Yamagami

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