Why interest rates not falling to pre-Covid levels


Target range: People take pictures on the boardwalk at Marina Bay in Singapore. Interest rates here take their cue from the US money market because the MAS uses the local dollar to pursue its goal of medium-term price stability. — AFP

SINGAPORE: A bigger-than-expected cut by the US Federal Reserve (Fed) may have given the impression that the interest rates on home and car loans here will rapidly fall to lows seen before the Covid-19 lockdowns.

US policymakers and some private economists believe that the world’s largest economy is in a new cycle, where low inflation, low growth and high unemployment are things of the past.

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