Here Is Why Interest Rates Will Increase In 2022

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Introduction

In today’s video, I want to voice my opinion with regards to the interest rate behaviour moving into 2022.

Without further ado let’s get started.

1. My opinion on interest rate behaviour in 2022

For the context of this video, I will be referring to the US interest rate as they have a large influence on the global interest behaviour and also the interest rate’s behaviour here in Singapore.

In fact, from the behaviour of the US Federal Fund rate and our 3-month Singapore Overnight Rate Average, we can see that there is a very high correlation between our interest rates and the interest rate of the United States.

Having said that, I believe that interest rates will increase moving into 2022 but the increase that we will experience will not be that significant. At least not at a pace where it rises so far so soon.

Also, even though I expect interest rates to start increasing in 2022, I doubt we will ever reach an interest rates level that we have experienced previously before the 2008 Financial Crisis.

And there are good reasons for this, let me explain.

2. Why interest rate is set to increase

In my opinion, there are two factors that will drive an increase in the interest rate in 2022.

The first is the concern over a rising inflation rate that we are currently experiencing and the second is the fact that the economy had been <