The Federal Reserve (known as the Fed), which conduct the monetary policy of the United States, had just announced an interest rate hike of 0.25%, with the possibly of another three more hikes in 20171.
For The Bedokian Portfolio investor, such information is important in the conduct of fundamental analysis (FA). Interest rates belong to the economic conditions category, the highest level of FA, meaning any changes to it will have some effect across some, if not most, financial markets.
The Link Between United States (US) and Singapore Interest Rate
Singapore, unlike the US, does not set its own interest rates. Instead, they are determined by the US interest rates and expectations of the Singapore Dollar’s movement.2 In other words, this means there is a high correlation in direction and movement between the US’s interest rates and Singapore’s. Hence this is the reason why local investors and …