In a widely anticipated move, the US Federal Reserve raised interest rates for the 10th time in just over a year. The Fed fund rate now stands at a target range of 5%-5.25%, which is the highest it has been since August 2007.Source: Bloomberg During the news conference that followed the meeting, Chairman Jerome Powell confirmed that "a decision on a pause was not made today." This is despite the omission of a sentence stating that “the Committee anticipates that some additional policy firming may be appropriate." It appears that the Fed has finally reached the terminal rates it had set out to achieve. S&P 500 & Nasdaq Index, Source: Bloomberg The bond markets initially priced a rate hike in the June Fed meeting. However, the sentiment soon changed into a likely rate pause

75 Bps Hike.The Federal Open Market Committee (FOMC) concluded on 15 June and as expected, interest rate on the upper range of Fed Fund rate was raised by 75bps to 1.75%. This is the largest since 1994 in a bid to ease runaway inflation which came in at 8.6% yoy in May 22.Many have argued that the Fed have been extremely late in the curve last year in addressing that inflation by considering that it was largely transitory.However, it is proved that inflation is stickier than previously thought given the supply side issues have been further exacerbated by on-going supply chain disruptions and the geopolitical crisis between Russia and Ukraine.The Fed continue to guide July’s FOMC rates increase in the range of 50-75bps and forecast a 3.25%-3.5% by end of 2022.Some impacts may 

Global inflation has been on the rise especially due to rising energy prices and food prices because of the ongoing Russian and Ukraine war and the global supply chain disruptions. Inflation is expected to stay higher for longer given that most of the factors are due to supply factors of inflation. Singapore Consumer Price Index (CPI) All Items rose by 5.4% in April according to data from Singapore Department of Statistics. Singapore’s May CPI will be announced today and is expected to trend higher for the next few months, given the import dependence of Singapore due to the lack of natural resources and as a result disrupted supply chain.Targeted aid for lower-income and vulnerable. Singapore has introduced a carefully designed S$1.5 billion support package that is tilted to help lower-inc

Key Market HighlightsUS markets recovered with $S&P 500(.SPX)$ up by 3.5%, after last week's brutal correction. Crude oil$Light Crude Oil - Jul 2022(CL2207)$ which peaked above US$122.1 per barrel earlier in the June, corrected from the recent high to US$103.5 on recessionary fears that may reduce the demand for crude. Markets should welcome this as this gives the Fed more maneuverability in its policies given that energy prices have been a key factor in rising costs. US 10-year yields pulled back sharply from the top of 3.47% to 3.1%, as investors could have overpriced the US rate hike cycle and could see a fourth US bear market rally YTD. Nikkei fell by -1.7% during

US rebounded marginally from a sequential fall in producer prices, post a sharp sell-off from major US indices on Tuesday, after key inflation data were above estimates with the CPI showing 8.3%, even as energy prices cooled. Core CPI which excludes food and energy components also came in at 6.3% versus prior month of 5.9%, which shows stickiness in key prices such as rent and electricity. While it has already been widely expected that a 75bps rate hike was possible in the upcoming week, the market raised the probability of potentially an even tighter monetary condition. US short term 2-year yields surged to over 3.8%.The ECB also decided on a jumbo rate hike of 75bps from zero last week, after the 50bps hikes in July. Europe is in a catch-22 situation given that inflation in August is exp

US markets fell last week with S&P500 down by 0.25% and hovering around bear market territory year to date having corrected about 20% YTD. The Fed’s preferred measure of inflation, the Personal Consumption Expenditure climbed by 6.3% in May, or 4.7% after stripping out food and fuel, which have started to show some moderation. Nasdaq fell -1.8% underperforming the S&P500 even despite the US 10-year yields falling below 3%, as investors are mixed as to whether the Fed is expected to reduce or maintain the pace of its rate hikes in the upcoming Federal Open Market Committee (FOMC). The ECB plans to start to raise rates in July and September for the first time in 11 years to tighten monetary policy in the medium term; Stoxx 50 was little changed during the week.S&P 500 & Nasda