How the economy hits your wallet: rates, inflation and cycles

Trace how MAS policy, US rates, inflation, recessions and currency moves reach your loans, savings and job, and decide what to do about each.

Economic news arrives as a stream of rate decisions, inflation prints and recession warnings, and most people handle it by ignoring it or by reacting to it, which leaves them surprised by a higher loan instalment one year and selling investments at a low the next. This course connects each headline to a line in your own finances: your home loan, your fixed deposits, your grocery bill, your job and your overseas spending. You learn why Singapore steers its dollar rather than an interest rate, how a Fed decision in Washington ends up in your mortgage, and what actually changes for a household in a recession. Then you write down rules for which news should change your plans and which should not.

What you'll be able to do

• Explain in plain words why MAS manages the Singapore dollar instead of setting an interest rate
• Trace a change in US rates through SORA to your mortgage, deposits and T-bill yields
• Read a monthly CPI release and compare headline and MAS core inflation with your own spending
• Identify the current stage of the business cycle from a short list of published indicators
• Size a job-loss buffer based on your own job risk and fixed costs
• Estimate the cost of a currency move on a trip, an overseas study plan or a foreign investment
• Write decision rules that tell you when economic news should and should not change your plans

Syllabus

Module 1: Understand how MAS steers the economy through the dollar

Why Singapore's central bank manages the exchange rate rather than an interest rate, how the policy band works, and what a tightening or easing means for your prices and pay.

• 1.1 Why MAS manages the Singapore dollar instead of an interest rate
• 1.2 Slope, width and centre: how the policy band works
• 1.3 What a stronger or weaker Singapore dollar does to you
• 1.4 Translate a MAS policy statement into plain words

Module 2: Trace how interest rates reach your loans and savings

Follow a US Federal Reserve decision through global markets and SORA into your mortgage, deposit rates and T-bill yields, then test what a rate move would do to your own numbers.

• 2.1 Why Singapore interest rates follow the US Fed
• 2.2 What SORA is and how it ends up in your mortgage
• 2.3 Deposits, fixed deposits and T-bills move with rates, at different speeds
• 2.4 The borrower and the saver in you feel a rate move differently
• 2.5 Stress-test your loans and savings for a rate move

Module 3: Read inflation numbers properly

What the consumer price index measures, how MAS core inflation differs from the headline figure, why prices rise, and how to track the inflation that matters for your own spending.

• 3.1 What the consumer price index measures and who publishes it
• 3.2 Headline inflation versus MAS core inflation
• 3.3 Why prices rise: demand, costs and imported inflation
• 3.4 Build your personal inflation tracker

Module 4: Know where the cycle is and what changes in a recession

The stages of the business cycle, the published indicators that show where the economy is, and what really changes for a household in a downturn, so you can set rules in advance.

• 4.1 The business cycle: expansion, peak, contraction and recovery
• 4.2 Indicators to watch: GDP, hiring, inflation and the yield curve
• 4.3 What actually changes for households in a recession
• 4.4 Money moves that make sense in a downturn, and ones that do not
• 4.5 Write your recession playbook

Module 5: Protect your income from the job market

How the job market turns before the headlines do, what Singapore's rules and guidelines say about retrenchment, and how to size a buffer for the risk of losing your income.

• 5.1 How the job market turns before the headlines do
• 5.2 Retrenchment in Singapore: what the rules and guidelines say
• 5.3 Size a buffer for losing your job, not just for emergencies
• 5.4 Skills and contacts are your income insurance
• 5.5 Build your job-loss runway sheet

Module 6: Handle currency moves on trips, studies and investments

Why exchange rates move, what they do to the cost of holidays, overseas study and foreign investments, and how to reduce the fees and timing risk you control.

• 6.1 Why exchange rates move
• 6.2 Holidays and overseas spending: fees, DCC and timing
• 6.3 Paying for overseas studies or a move in another currency
• 6.4 Currency risk in foreign investments, hedged and unhedged
• 6.5 Plan a foreign currency cost from start to finish

Module 7: Read economic news without reacting to it

How economic headlines are built, how to separate surprise from expected news, and how to write decision rules so news informs your plans without driving them.

• 7.1 How a headline is built and what it leaves out
• 7.2 Separate what changed from what was expected
• 7.3 Rules that stop you acting on the news
• 7.4 Build your personal economic dashboard

Frequently asked questions

How long does the course take?

About eight hours across seven modules, including the exercises. Most people finish in three weeks at two or three hours a week.

Do I need an economics background?

No. You should be comfortable with interest, inflation and real returns, which are taught in How money works: banks, interest, inflation and risk. Every economic idea here is explained from scratch and tied to a decision about your own money.

Will this help me time the market?

No. The course teaches you to understand economic news and to set rules so it does not push you into rushed decisions. Using macro views in a portfolio is covered in Investing Like an Institution.

Is this financial advice?

No. The course is education. It explains how the economy affects your money and how to decide for yourself, and never tells you what to buy or when. Rates and figures change, so always check the current numbers at the source, and speak to a licensed financial adviser about your own situation.

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