Inflationary risks have transitioned into longer-term trends, marking the end of low interest rates.
The global economic landscape, characterized by low inflation and accommodative monetary policies, has undergone a significant shift in recent years. The once-prevailing era of low interest rates and abundant liquidity was disrupted by the onset of the Covid-19 pandemic, which triggered a surge in inflation.
As the world continues to recover from the pandemic, it has become evident that the economic environment will not return to the pre-pandemic status quo. The Monetary Authority of Singapore (MAS) is closely monitoring the evolving risks that supply-side shifts pose to global inflation, highlighting concerns about inflation turning into longer-term trends. With these structural shifts, the age of low interest rates seems to have come to a definitive end.
