Hope you're well. I wanted to flag something that should be on your radar. Take a look at this chart. You'll see that after all the pain we went through in 2022, when US inflation hit 9% and Europe touched 11%, we finally got things under control after Covid. Central banks did their job, inflation cooled off, and by late 2025, we were sitting pretty comfortable. The US was hovering around 3%, Europe at 2.5%, and here in Singapore, we were down to about 1.2%.

But notice what's happening on the bottom half of that chart. Oil prices.

In the past quarter, we've seen Quarter-on-Quarter Rate of Change in WTI Crude jump 47% and Brent up 42%. That's not a typo. We're talking about the kind of move we haven't seen since the Covid Lockdowns of 2022. And here's the thing: oil has a nasty habit of working its way through the entire economy. Transportation costs, manufacturing, plastics, food production... it touches everything.

So the question mark you see on the chart? That's where we're headed. And I'll be honest with you. I don't think those inflation rates are staying put. We're likely looking at a second wave of price pressures, just when everyone thought we were out of the woods.

Now let's bring this home and talk about what happens when inflation starts heating up again. Because it's not just about prices at the pump or your grocery bill. There's a chain reaction that affects everything from your mortgage rates to your purchasing power.

Look at what happened in 2022. When inflation in Singapore shot up to 7.5%, the first thing that moved was borrowing costs. That black line on the chart shows our 10-year government bond yield, which is essentially the baseline for all borrowing costs in the economy. It climbed from around 2% to nearly 3.6%. That means home loans got more expensive. Business loans got more expensive. Everything tied to credit became pricier.

Here's how it works, and this is important because Singapore does things differently. Unlike the Fed or ECB that fiddle with interest rates directly, MAS uses currency control as its primary tool. They manage the Singapore dollar within a policy band, letting it strengthen or weaken to control inflation. When inflation heats up, they allow the SGD to appreciate, which makes imports cheaper and cools down price pressures. But here's the thing: even though we're not raising interest rates the traditional way, bond yields still respond to inflation expectations and global rate movements. So you get the same effect on borrowing costs.

Right now, our 10-year yield is sitting at about 2.04%. Pretty comfortable. But if inflation comes roaring back because of these oil price moves, you can bet that number is going higher. The MAS will likely let the currency strengthen again, but bond markets will still reprice. Maybe not back to 3.6%, but higher nonetheless.

Then comes the wage piece, and this is where it gets interesting for most of us. Check out that bottom chart. Wages in Singapore stayed relatively stable through most of the inflation surge, hovering around 8% to 9% growth. But look at what happened in 2025. They fell off a cliff, dropping into negative territory. The recovery we're seeing now has wages growing at 5.38%, which sounds decent until you realize that if inflation picks up steam again, real purchasing power starts shrinking.

The painful reality is this: wages are always the last to adjust. Inflation hits first. Borrowing costs react within months. But wages? They take time. Companies negotiate annual cycles. Workers need to push for raises. It's slow.

So if we're staring down another round of inflation pressure from oil, we need to be thinking about what this means for real returns. Your investments need to work harder. Fixed income at 2% yields won't cut it if inflation climbs back to 3% or 4%. And if you're holding cash, you're actively losing purchasing power.

That question mark on the chart isn't just about where inflation goes. It's about whether borrowing costs spike again, and whether your income can keep pace. Right now, we're in a sweet spot, but the window might be closing faster than most people think.

This marks a fundamental shift away from the era of easy money toward a period of scarcity and currency devaluation. To navigate this, our strategy must move away from traditional portfolios and toward assets that can withstand a world where the old rules of borrowing and spending no longer apply.

In this month’s issue of THE MACRO GPS, we break down the inflation and the currency shifts and moving into future growth areas with better middle-class demographics, clean energy, semiconductors, EVs, Robotics and AI. What this new macro map means for your capital in 2026.

Let’s dive in.

Sincerely,