• Home
  • Breaking News
  • Privacy Policy
  • Email Whitelisting
No Result
View All Result
Money Profit News
No Result
View All Result
Home Breaking News

Entirely possible that we’ll see low interest rates forever, asset manager says

by
November 15, 2021
in Breaking News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Related Posts

Insiders Pour Millions Into These 2 Beaten-Down Stocks, Analysts Say They Could Be Ready to Bounce Back — Here’s Why You Should Pay Attention

Arby’s employee found dead in freezer had ‘beat her hands bloody’ trying to escape, lawsuit says

Markets are sounding alarms on China’s economy, but analysts say Wall Street is missing the big picture

3 reasons why even China doesn’t want the yuan to replace the dollar as the world’s reserve currency

The Marriner S. Eccles Federal Reserve building stands in Washington, D.C., U.S., on Tuesday, Aug. 18, 2020.

Erin Scott | Bloomberg via Getty Images

Interest rates could remain at their record lows “forever,” according to one asset manager, despite a recent rush to normalize policy by many of the world’s central banks.

GAM Investments’ Julian Howard told CNBC’s “Squawk Box Europe” last week that he believed it was “entirely consistent historically to talk about low rates forever.”

Howard is the lead investment director of multi-asset solutions at GAM, which has 103 billion Swiss francs ($112 billion) in assets under management.

He cited research by economic historian Paul Schmelzing, who was a visiting scholar at the Bank of England when the paper was published in 2020.

The research looked at interest rates globally dating back to the 14th century, identifying a downward trend, with Schmelzing predicting that “real rates could soon enter permanently negative territory.”

Howard said the lower rates that we had seen in recent years were, therefore, “actually a return to a very, very long-term trend of yields falling over an extended period of time.”

He pointed to the economic damage caused by the coronavirus pandemic and climate change, which is set to have a “very, very negative effect on interest rates,” he added.

“There’s no context in which a central bank will be able to normalize, sort of 1990s style normalize, interest rates when there’s going to be absolutely no growth,” Howard explained.

Howard expected that the Federal Reserve would probably only start raising interest rates in the second half of 2022.

Rep. Jim Himes, D-Conn., told CNBC Tuesday that low interest rates and the “free money” that we had seen for many years, risked creating asset bubbles.

This is when the price of an investment rises rapidly, but the jump not necessarily reflecting the asset’s underlying value.

Himes added that low rates had also resulted in “remarkably odd financial behavior,” such as the “near-cult” growth of special purpose acquisition companies, or the “dumping of money into meme stocks,” which are companies that have gained surprise popularity on social media and have seen their share prices spike.

Himes suggested that it was the responsibility of the Federal Reserve to manage such risks around low interest rates.

He said: “I fought my entire career to make sure monetary policy does not get influenced by the tender mercies of political people in the Congress but I think … we’re taking a turn there and hopefully that will begin over time to maybe take some of the risk out of what are pretty clearly some asset bubbles out there.”

The Fed has started to normalize policy after the economic fallout from the coronavirus pandemic. It said earlier in November that bond purchases would start to taper “later this month” and acknowledged that price increases had been more rapid and enduring than central bankers had forecast.

The Fed also voted not to raise interest rates from their anchor near zero, and warned against expecting imminent rate hikes.

Next Post

Cathie Wood just called this technology the 'next big frontier' with a market opportunity of $80 trillion — here are 3 easy ways to invest in it

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Popular Posts

Breaking News

Insiders Pour Millions Into These 2 Beaten-Down Stocks, Analysts Say They Could Be Ready to Bounce Back — Here’s Why You Should Pay Attention

by
May 30, 2023
0

Read more

Insiders Pour Millions Into These 2 Beaten-Down Stocks, Analysts Say They Could Be Ready to Bounce Back — Here’s Why You Should Pay Attention

Arby’s employee found dead in freezer had ‘beat her hands bloody’ trying to escape, lawsuit says

Markets are sounding alarms on China’s economy, but analysts say Wall Street is missing the big picture

3 reasons why even China doesn’t want the yuan to replace the dollar as the world’s reserve currency

The AI Boom Runs on Chips, but It Can’t Get Enough

Nvidia is not the only firm cashing in on the AI gold rush

Load More

All rights reserved by www.moneyprofitnews.com

  • Home
  • Breaking News
  • Privacy Policy
  • Email Whitelisting
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

moneyprofitnews