US aligns inflation policy with Singapore’s MAS, other central banks with first rate hike since 2023
Singapore has been tightening monetary policy since April to fight inflation.
On September 16, the United States Federal Reserve increased its benchmark interest rate by a quarter percentage point for the first time since 2023. This decision mirrors the Monetary Authority of Singapore's (MAS) move in July to tighten its policy stance for the second consecutive time. The Fed's action was taken in response to strong economic growth and escalating inflation due to surging energy prices, driven by the Iran war and robust domestic investment.
Both Singapore and the US are now following a similar monetary policy approach to combat inflation, despite global economic disparities. The move also aligns with recent interest rate hikes by the European Central Bank and the Bank of Japan. Analysts predict more rate hikes from the Fed in the coming months, which may influence Singapore's monetary policy as well.
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