T-bill yield declines as Fed signals further rate cuts: Weekly Market Recap

At our monthly Ask SIAS webinar this week, someone asked a very timely question—how should we position our portfolios for interest rate cuts?

This is a question I’ve been thinking about quite a lot too. The yield on the 6-month Singapore T-bill just dropped to a 3-year low of 2.0%, and the latest best fixed deposit rates in Singapore have been falling too.

This comes as the US Federal Reserve signalled two interest rate cuts for the rest of 2025.

For those looking to lock in rates for the longer term, this month’s Singapore Savings Bonds (SSBs) offer a 10-year average return of 2.49%, with the flexibility to redeem early if needed.

If you're still on the hunt for income, Singapore’s stock market remains a bright spot. We’ve highlighted 5 blue-chip stocks that are currently offering dividend yields above 5%.

To dive deeper into what all this means, and how to invest wisely as we enter a new rate environment, join us at our upcoming seminar on 25th June. You can register for free here.

I’ll be there to share more, and I look forward to chatting with some of you then!

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

🏛 Uncertainty diminished but elevated

What happened? 

The U.S. Federal Reserve kept interest rates steady for the fourth straight meeting this week, as widely expected by investors.

But while the rate stayed unchanged, the Fed's latest economic projections signalled a more cautious outlook. 

Inflation is now expected to be higher at 3% by the end of 2025, up from the previous estimate of 2.7%. 

At the same time, the Fed trimmed its growth forecast for the U.S. economy next year to 1.4%, down from 1.7%.

What does this mean?

The Federal Reserve is still signalling two interest rate cuts in 2025.

This is consistent with investor expectations, with the CME FedWatch Tool pointing to a possible rate cut in September, and another in December.

However, not all officials are on the same page, with the latest projections reveal growing disagreement among policymakers on the path forward.

Why should I care?

US stocks were mixed as investors weighed the Fed comments with latest developments in the Middle East. 

Singapore stocks fell with weaker investor sentiment. However, selected REITs bucked the downward trend as bond yields declined. 

Gains were led by Mapletree Logistics Trust (+2.7%), Frasers Centrepoint Trust (+2.3%) and CapitaLand Integrated Commercial Trust (+1.9%). 

🚗  Moving This Week

• SIA and its low-cost arm Scoot reported a 3.1% year-on-year increase in passenger traffic in May, easing from the 4.8% rise in April which was partly boosted by the Easter holidays. The group’s passenger load factor (PLF) inched up 0.3 percentage point year on year to 86.4%. Read more here.
• Wilmar International has handed over 11.8 trillion rupiah (S$928 million) to the Indonesian authorities in the company’s ongoing fight against corruption charges tied to the country’s 2021 cooking-oil crisis. Read more here.
• SingPost has put up 10 Housing & Development Board (HDB) shophouses for sale and leaseback under its plan to divest non-core assets. These properties, distributed across the HDB heartlands, are expected to fetch S$50 million in total, according to the Business Times. Read more here.
• Sembcorp Industries has completed the acquisition of an additional interest in Senoko Energy for $72 million, bringing its total stake to 50%. The acquisition is expected to be accretive to the earnings per share of Sembcorp for the financial year ending Dec 31, 2025.
• AIMS APAC REIT has completed the divestment of 3 Toh Tuck Link for $24.388 million. The property, which is a part four-storey and part five-storey warehouse building with ancillary office spaces, had a sale price which was at a 32.5% premium to its valuation as at March 31. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

SSB 10-year return at 2.49%. Better than T-bills and fixed deposits?

The current issuance of the Singapore Savings Bond (SSB) offers a 10-year average return of 2.49% per year. Applications for the latest SSB will close on 25 June 2025.

🤓 What we're looking out for next week

• Wednesday, 25 June: Beansprout seminar “What’s next for Singapore stocks in 2025?”, SSB application closing date
• Friday, 27 June: University of Michigan Inflation data

Get the full list of stocks with upcoming dividends here. 

Source: SGX, Bloomberg, Refinitiv

Join the Beansprout Telegram group and Facebook group for the latest insights on Singapore stocks, REITs, bonds and ETFs.