Mansour Muhiuddin, chief economist of the Bank of Singapore, pointed out in the latest research report that the credit rating downgrade of the United States on Friday has a wide impact on its economic outlook. The economist emphasized three core points:
First, "the deteriorating fiscal situation in the United States has strengthened our judgment that the long-term yield of U.S. bonds will gradually rise." The bank maintained its forecast that the 10-year U.S. Treasury yield will hit 5.00% in the next 12 months.
Second, the challenges faced by 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 add that huge fiscal deficits and inflationary pressures may force the Federal Reserve to maintain high interest rates for a long time. Current data shows that the 10-year U.S. Treasury yield rose 7 basis points to 4.5107%.
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