DBS Chief Expects US to Remain Global Growth Engine but Warns of Headwinds

Outgoing DBS Bank chief executive officer Piyush Gupta expects the US to remain as a global growth engine but warns of three potential headwinds that could lead to a market correction.

- Angela Tan

Mr Gupta, who joined the Singapore bank in 2009 from Citibank, will be passing the reins to Ms Tan Su Shan, the group's head of institutional banking, at DBS' annual general meeting on March 28.

During his tenure, DBS began its digital transformation, a journey that propelled the bank's earnings, and eventually its market value beyond $120 billion - a feat unrivalled here.

Mr Gupta delivered his last opening address on Jan 13 at the DBS Private Bank Market Outlook for the first quarter of 2025.

He said: "The biggest source of strength in the global economy comes from the US. Retail sales have been holding up... Inflation is high, but payroll data is high and jobs are being created."

He reckoned the base case of assuming a soft landing is still pretty much intact. A soft landing would mean the US Federal Reserve has accomplished the difficult task of taming inflation without triggering a recession.

While the market now assumes no more interest rate cuts by the Fed, Mr Gupta expects to see "a couple of rate cuts at least".

Uncertainties related to US policy loom large. If President-elect Donald Trump's administration implements targeted tariffs and modest fiscal easing, the overall impact could provide a tailwind for US growth. If so, it makes sense for investors to buy US equities even though they are expensive, as earnings are coming through, Mr Gupta added.