The results imply that the president-elect’s mandate of raising tariffs on imports from China and other countries and tax cuts for the rich are likely to be implemented. Assuming the US Fed maintains its independence, Asia-Pacific — and Asean in particular — may need to brace themselves for a spate of interest rate rises in the next two years.
The banking sector — including Singapore’s — is highly sensitive to interest rate movements made by the US Federal Reserve (Fed), as any changes introduced by the US central bank may impact their margins. When the US Fed began hiking interest rates from 2022 to 2024 to combat high inflation levels — the highest seen in decades — banks benefitted from higher net interest margins (NIMs), a measure of the bank’s profitability.
The much-awaited US Presidential election on Nov 5 resulted in a red sweep, with the Republicans winning most of the seats in the Senate and candidate Donald Trump in the White House. As of Nov 11, the Republicans are also inching towards clinching control of the US House.
