Index Option Calls
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Index Option Calls
No Result
View All Result
Home Latest News

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

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

RELATED POSTS

Best Options Prop Trading Firms (2023) | 13 Top Prop Firms for Options Trading

May Employment Preview

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

Best Options Prop Trading Firms (2023) | 13 Top Prop Firms for Options Trading

by
June 2, 2023
0

As a seasoned options trader, you’ve decided it’s time to up your game by joining a proprietary trading firm. The...

May Employment Preview

by
June 2, 2023
0

by Calculated Risk on 6/01/2023 02:34:00 PM On Friday at 8:30 AM ET, the BLS will release the employment report...

U.S. Births decreased Slightly in 2022

by
June 2, 2023
0

by Calculated Risk on 6/01/2023 03:00:00 PM From the National Center for Health Statistics: Births: Provisional Data for 2022. The...

Friday: Employment Report

by
June 2, 2023
0

by Calculated Risk on 6/01/2023 09:01:00 PM Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios. Friday:...

Meta will require employees to return to the office three days a week starting in September

by
June 2, 2023
0

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., left, arrives at federal court in San Jose, California, US, on...

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

  • A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

    0 shares
    Share 0 Tweet 0
  • A California Couple Spent Eight Years Building Their Dream Retirement Home in Costa Rica

    0 shares
    Share 0 Tweet 0
  • Goldman Sachs says buy these stocks to play Web 3.0 and the metaverse

    0 shares
    Share 0 Tweet 0
  • In his final warning, this stock trading wizard — who made big money in bear markets and crashes — called this market a bubble like no other

    0 shares
    Share 0 Tweet 0
  • Goldman Sachs picks new stocks to buy — and says these 5 have over 100% upside

    0 shares
    Share 0 Tweet 0
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.indexoptioncalls.com
No Result
View All Result
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy

All rights reserved by www.indexoptioncalls.com