Weekly recap: T-bill and SSB interest rates stay high even as Fed signals rate cuts

There has been much discussion about how we can better plan for our retirement after it was announced that the CPF Special Account (SA) will be closed for those aged 55 and above. 

This was also a question that was brought up at a recent Community Meetup event I attended. 

It seems like more and more people are thinking hard about how we can plan for our dream retirement. 

From the sharing at the event, I learnt that it boils down to a few key strategies:

• Start small, start now: The sooner we begin, the more we can magnify our savings through the magic of compounding.
• Maximise our CPF: Utilise our CPF to its fullest to ensure a solid foundation for our retirement nest egg.
• Invest in ourselves: Stay curious and learn new skills to unlock new opportunities for income and fulfilment. 

For those who are looking to dip your toes into investing with something relatively safe, the latest Singapore Savings Bond offers a 10-year average return of 3.04% per annum. 

With interest rates remaining high, we explore if it might be worthwhile waiting for the next SSB based on our current SSB interest rate projections. 

If you are planning to make your CPF savings work harder by applying for the upcoming T-bill, we share what to look out for and what the latest indicators are telling us about the potential yield.

Lastly, with the impending changes to the CPF SA next year, we uncover a few ways you can still achieve retirement success. 

Regardless of how near or far we may be from our retirement, the key is to start planning for it today.

Gerald, Founder of Beansprout

✂️ FED KEEPS RATE CUT HOPES ALIVE 

What happened? 

The US Federal Reserve (Fed) kept interest rates unchanged at its latest policy meeting as expected. 

Fed Chairman Jerome Powell shared that the policy rate is likely at its peak, and officials kept their previous projection for three rate cuts in 2024.

What does this mean?

The Fed’s latest inflation rate decision provided confidence to investors that interest rates will be cut this year despite stronger than expected inflation in recent months. 

According to the CME Fedwatch Tool, the probability of the first rate happening in June increased to 67% from 55% a week ago. 

Why should I care? 

US government bond yields fell following the Fed meeting, with the 10-year US Treasury declining to 4.2% from 4.3% a week ago. 

Stocks rallied with the S&P 500 reaching new all-time highs, with gains led by tech stocks. 

Singapore REITs also bounced, with gains led by OUE REIT, Far East Hospitality Trust and Frasers Logistics & Commercial Trust. 

Amongst large cap REITs, CapitaLand Ascendas REIT and CapitaLand Integrated Commercial Trust outperformed the Straits Times Index (STI).  

🚗  MOVING THIS WEEK

• Singtel announced it will be launching its GPU-as-a-Service (GPUaaS) in Singapore and Southeast Asia in the third quarter of this year, providing enterprises with access to NVIDIA’s AI computing power. Read our analysis of Singtel here. 
• SingPost has completed its strategic review which will involve five “strategic thrusts” to be executed over the next three years, including the reorganisation of the group into three business units. The company will also endeavour to pay out 30 to 50% of its underlying net profit as dividends from FY2024 to FY2025. The Board is of the view that the current share price “does not appropriately reflect the intrinsic value of the company”.
• Apple was sued by the US Department of Justice over allegations it illegally maintained a monopoly for its iPhone by stifling competition.
• Nvidia unveiled a new AI processor called Blackwell that is multiple times faster at handling models that underpin AI, in a move that is aimed at extending the company’s dominance in AI computing. 
• Reddit’s share price jumped following its initial public offering (IPO) that saw the social media company price its shares at the top end of the expected range.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 THE BIG IMPORTANT STORY

UOB offers lowest dividend yield amongst local banks. Switch to DBS?

UOB's share price has been weaker than DBS to OCBC as it offers a lower dividend yield. 

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 25 Mar: SSB application closing date
• Wednesday, 27 Mar: Singapore 6-month T-bill auction
• Thursday, 28 Mar: US GDP data
• Friday, 29 Mar: Good Friday public holiday 

Get the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

Source: SGX, Bloomberg, Refinitiv

🌱 PLANT THE SEED OF WEALTH

"I did not intend to get rich. I just wanted to get independent."
 

- Charlie Munger, Investing Legend

🤔 1 QUESTION THIS WEEK

What is your personal financial goal? Share with us in the comments section below.

We read them all and will do our best to answer any queries you may have.

👩‍💻 WATCH OUR RECAP

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