Stock Market Cafe
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Stock Market Cafe
No Result
View All Result
Home Trading News

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

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

RELATED POSTS

Why driving big rig trucks is a job fewer Americans dream about doing

Bank of England’s Bailey warns global economic outlook has ‘deteriorated materially’

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.

ShareTweetPin

Related Posts

Why driving big rig trucks is a job fewer Americans dream about doing

by
July 5, 2022
0

In this article WMT XPO UPS JBHT A Walmart truck departs the company's distribution center in Washington, Utah. Bloomberg |...

Bank of England’s Bailey warns global economic outlook has ‘deteriorated materially’

by
July 5, 2022
0

Andrew Bailey, governor of the Bank of England, has said the global economic outlook has deteriorated materially after surging commodity...

Dow falls 600 points as Wall Street grapples with recession concerns

by
July 5, 2022
0

Stocks fell on Tuesday as concerns about a possible recession in the U.S. weighed on investor sentiment. The Dow Jones...

Oil tumbles more than 8%, breaks below $100 as recession fears mount

by
July 5, 2022
0

Oil well pump jacks operated by Chevron Corp. in San Ardo, California, U.S., on Tuesday, April 27, 2021. David Paul...

Fourth of July weekend marred by violent shootings across U.S.

by
July 5, 2022
0

FBI agents work the scene of a shooting at a Fourth of July parade on July 5, 2022 in Highland...

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

Supermarkets Alter Layouts, Use Decoys to Fill Gaps Left by Shortages

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!

MOST VIEWED

  • Crocs sees fourth-quarter sales up 42%, CEO Andrew Rees says 2021 was ‘exceptional year’

    0 shares
    Share 0 Tweet 0
  • Buying a car from the factory sounds expensive, but it can actually save you money. Here’s how to do it.

    0 shares
    Share 0 Tweet 0
  • Roth TSP vs. Roth IRA: How Do They Compare?

    0 shares
    Share 0 Tweet 0
  • The states that won’t tax military retirement in 2022

    0 shares
    Share 0 Tweet 0
  • Allbirds stock has plunged 50% in two months, now one top analyst says buy it

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.stockmarket-cafe.com
No Result
View All Result
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy

All rights reserved by www.stockmarket-cafe.com