Global debt is keeping a lid on interest rates

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Markets remain uncertain and volatile in the wake of Janet Yellen’s decision to keep US rates on hold.

Livewire interviews Vimal Gor, Head of Income & Fixed Interest, to get his views on where interest rates are heading – and the factors he believes are most influential on central bank decision making.

Gor says, “I wouldn’t be surprised if interest rate bond yields are pretty much unchanged now to where they are in two years’ time. I think it is unlikely any central bank will be able to raise rates materially in the front end and I think we will just be stuck in a range.”

He says one of the key factors at play are elevated debt levels across the globe, which are now higher than pre GFC levels. “Ultimately if you are in a world that has higher debt levels it can’t handle higher interest rates.”

Watch the full Livewire interview, where Vimal explains why he thinks another round of QE isn’t out of the question in the US.

 

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