We are now moving to the third quarter for 2025. There have been significant changes to the global economy, with continued negotiations on tariffs and the passing of a multitrillion-dollar package of tax cuts and spending in the United States. Given the magnitude of these changes, it could have a significant impact to the inflation and interest rate environment. From my end, given that I have not witnessed such situations before, I will need to assess the impacts and learn from these scenarios as it plays out over the next few months.
Website: House passes sprawling domestic policy bill, sending it to Trump’s desk
As of 18 June 2025, the Federal Reserve funds rate remain at 4.25% to 4.50%, unchanged since 19 December 2024. The market narrative as of June 2025 was that there was no hurry, though there are plans to see two more rate cuts during the year. Investors will need to monitor if there are any changes over the next few months as the uncertainty around the world continues.
Website: Fed holds key rate steady, still sees two more cuts this year
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
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Singapore Savings Bond
The Singapore Savings Bond (“SSB”) for August 2025 issuance has a 10-year average return of 2.29%. As the SSB is backed by the Singapore Government and has a credit rating of AAA, for now this is one of the safest investments out there. Long-term holders should use the 2.25% as a risk-free rate when making your purchase considerations.
Website: SBAUG25 GX25080X Bond Details
I have extracted the daily June 2025 rates from MAS e-service website and noted that the 10-year average yield is as below for confirmation.
| June 2025 Date | 10-Year Yield |
|---|---|
| 2 | 2.43% |
| 3 | 2.36% |
| 4 | 2.36% |
| 5 | 2.33% |
| 6 | 2.27% |
| 9 | 2.30% |
| 10 | 2.30% |
| 11 | 2.32% |
| 12 | 2.29% |
| 13 | 2.27% |
| 16 | 2.32% |
| 17 | 2.30% |
| 18 | 2.28% |
| 19 | 2.30% |
| 20 | 2.29% |
| 23 | 2.29% |
| 24 | 2.25% |
| 25 | 2.26% |
| 26 | 2.24% |
| 27 | 2.22% |
| 30 | 2.20% |
| Average | 2.29% |
Summary
With my market risk premium of 2.50% and the risk-free rate of approximately 2.25%, this would translate to my expected dividend yield for new purchases to remain unchanged in 2025Q3 at 4.75%.
Take note that if there are assets with yields that may be significantly above 4.75%, it may also be accompanied with higher underlying risks. Investors should also not just look at dividend yield but also at the strength of the company, such as their management team, when making the investment decision.
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