The Business Times
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SENSE & CENTS

Mega trends could drive more elevated interest rates over the longer term

High trade tariffs and weak sovereign credit will exert upward pressure on interest rates 

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Leslie Yee

Leslie Yee

Published Tue, Oct 14, 2025 · 07:00 AM
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    • Interest rates may trend lower near term, but there are substantial risks of much higher interest rates over the longer term.
    • Interest rates may trend lower near term, but there are substantial risks of much higher interest rates over the longer term. PHOTO: REUTERS

    [SINGAPORE] Softer interest rates can be a boon for individuals and businesses. For one thing, US President Donald Trump has been pushing the Federal Reserve to lower interest rates more aggressively.

    Whoever succeeds incumbent Jerome Powell, whose term as Federal Reserve chairman ends in May 2026, will likely be much more dovish on interest rates.

    Cheaper debt helps indebted households as lower debt financing costs will mean higher disposal income. Meanwhile, businesses can invest more and/or enjoy higher profits when borrowing costs reduce.

    Interest ratesBondssovereign bondUS tariffsTrade warPopulismSense & Cents

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