• Dovish tone by Federal Reserve Chairman Jerome Powell reinforce interest rate stability. Fed funds futures is expecting one rate cut in 2020 to 1.25%-1.5%.
• In Singapore sectors, we are NEUTRAL on the S-REITs sector with sub-sector preferences: Office and Industrial, and NEUTRAL on Singapore Banks.

Interest rates forecast

FOMC – In the meeting on 29 January 2020, all 10 members of Federal Reserve’s rate-setting panel voted unanimously to hold the rates stable in the range between 1.5% and 1.75%. The dovish tone by Federal Reserve Chairman Jerome Powell during the statement lowers the likelihood of a rate hike. However, the market is even more dovish, which the Fed funds futures predicting at least 1 rate cut this year.