As you know, a month or two ago I shared my view that the market pricing on interest rates was wrong.
To me, the market pricing was wrong in 2 ways:
- Short term interest rates need to go higher than what the market is expecting
- The timing of interest rate cuts will not be as early as the market is expecting
The market seems to have woken up to this reality.
Where we are today, the market is now pricing in 1 more rate hike to 5.5%, and no interest rate cuts until late 2023 / early 2024.
This looks a lot closer to what I think is the interest rate end game.
So I wanted to share some views on what I think happens next.
At the same time, there are interesting developments in short term interest rates in Singapore – both on T-Bills and MAS Bills that I wanted to discuss....
