Faster US rate hikes to have mixed impact on Singapore

Singapore

THE United States Federal Reserve's decision to step up the pace of interest rate increases signals its optimism about the economy but will likely have a mixed impact on Singapore and Asia.

On the one hand, a stronger US economy spells good news for regional exporters. However, higher rates will push up borrowing costs in Singapore and the region.

The risk that interest rates might rise even more quickly than expected is also fanning fears of capital outflows from the region, which could lead to market volatility.

These uncertainties come on top of worries that escalating trade tensions could derail global economic growth.

The US Federal Reserve hiked its benchmark s…