We are now moving into the 2nd quarter of 2026. This quarter started with an escalating conflict between Israel and Iran, punctuated by the closure of the Strait of Hormuz in March 2026 and triggering a severe “supply-side shock.” This has effectively ended the era of cheap credit and forced global central banks to pivot from planned rate cuts to a defensive, hawkish stance.
The Federal Reserve on 18 March 2026 has held interest rates steady at the range from 3.50% to 3.75% and projected higher inflation, steady unemployment and a single reduction in borrowing costs this year, a path that US Federal Reserve chair Jerome Powell said was subject to unusually high uncertainty as policymakers take stock of the impact of the US and Israeli war with Iran.
Website: US Fed leaves interest rates unchanged, expects inflation to rise
The convergence of geopolitical instability and structural logistics failures suggests that the long term “neutral” interest rate has been fundamentally recalibrated upward. Businesses must transition away from the “pivot” narrative and prepare for a protracted high-interest rate environment characterized by extreme volatility throughout 2026.
The stabilization of the global rate trajectory is now entirely contingent on two external variables: the restoration of safe passage through maritime chokepoints and the cooling of energy driven “cost push” inflation. Until these supply side bottlenecks are resolved, the balance of risks remains heavily skewed toward monetary tightening. Consequently, market participants should prioritize liquidity and debt servicing resilience, as the probability of defensive rate hikes significantly outweighs the likelihood of policy easing for the foreseeable future.
Disclaimer: Not financial advice. This content is provided for general informational purposes only and does not constitute financial, investment, legal, or tax advice. The information presented is based on publicly available data and estimates that may be subject to change without notice. It does not take into account your individual financial situation, investment objectives, risk tolerance, or specific needs.
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Singapore Savings Bond
The Singapore Savings Bond (“SSB”) for May 2026 issuance has a 10-year average return of 2.14%. 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. Accounting for rounding and simplicity, 2.25% shall be applied as the risk-free rate for articles during the quarter, taking into consideration the relatively higher interest rates toward the end of the month of March 2026.
Website: SBMAY26 GX26050H Bond Details
The March 2026 daily 10-year average yield rates from MAS e-service website are extracted as below for confirmation.
| March 2026 Date | 10-Year Yield |
|---|---|
| 2 | 1.92% |
| 3 | 1.97% |
| 4 | 1.97% |
| 5 | 1.98% |
| 6 | 2.00% |
| 9 | 2.12% |
| 10 | 2.07% |
| 11 | 2.05% |
| 12 | 2.06% |
| 13 | 2.10% |
| 16 | 2.12% |
| 17 | 2.13% |
| 18 | 2.10% |
| 19 | 2.15% |
| 20 | 2.12% |
| 23 | 2.28% |
| 24 | 2.23% |
| 25 | 2.20% |
| 26 | 2.29% |
| 27 | 2.41% |
| 30 | 2.38% |
| 31 | 2.29% |
| Average | 2.13% |
Summary
With an applied market risk premium of 2.50% and the risk-free rate of approximately 2.25%, this would translate to an expected dividend yield to increase to 4.75%.
It should be noted that securities offering yields materially in excess of 4.75% may be subject to heightened levels of credit, market, and business risk. Higher yields may reflect increased uncertainty regarding the issuer’s financial condition or future cash flow sustainability. Investors should not rely solely on dividend yield as an indicator of investment attractiveness and are encouraged to conduct a comprehensive assessment of the issuer’s fundamentals, including management quality, financial strength, and long-term business viability, prior to making any investment decision.
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Website: Reasonable Dividend Yield 2026Q1 – 4.75%
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