Singapore Bank: Downgrade of US credit rating has wide impact on economic outlook.

Mansoor Mohi-uddin of Singapore Bank stated in a research report that the downgrade of U.S. credit rating last Friday has a broad impact on its economic prospects. "Firstly, the deteriorating fiscal situation in the U.S. makes us more firmly believe that long-term U.S. Treasury yields will rise over time," the chief economist said. The bank continues to predict that the 10-year U.S. Treasury yield will reach 5.00% within the next 12 months. Secondly, the threat to the safe-haven status of U.S. Treasury bonds highlights the bank's view that the U.S. dollar has peaked. Lastly, the economist added that the huge U.S. deficit and inflation may force the Federal Reserve to maintain higher rates for a longer period of time. The 10-year U.S. Treasury yield rose 7 basis points to 4.5107%.