Singapore Bank: The safe-haven status of U.S. Treasuries is precarious, highlighting the view that the dollar has peaked.

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On May 19, Mansoor Mohi-uddin, Chief Economist of Bank of Singapore, stated in a research report that the downgrade of the US credit rating last Friday has widespread implications for its economic outlook. Firstly, the deteriorating fiscal condition of the US strengthens the view that long-term US Treasury yields will rise over time. The bank continues to forecast that in the next 12 months, the yield on 10-year US Treasury bonds will reach 5.00%. Secondly, the threat to the safe-haven status of US Treasury bonds highlights the bank's belief that the dollar has already peaked. Finally, the US's huge deficit and Inflation may force The Federal Reserve (FED) to maintain interest rates at elevated levels for a longer period. (Jin10 )

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