“With Trump elected as president, the trajectory of future rate cuts has become more uncertain due to the potential inflationary impact of his policies,” say analysts Darren Chan and Liu Miaomiao in a Nov 25 note.
Given the high percentage of loans on fixed rates, it will take time for S-REITs to benefit from interest rate cuts. However, Phillip Securities analysts expect fewer rate cuts from the US Federal Reserve in 2025, down to three from five previously.
The Fed cut its benchmark rate by 25 basis points (bps) to a target range of 4.5%-4.75% on Nov 7, the second consecutive rate cut this year after September’s 50bps cut.
