Lower for longer on rates?


Lower for longer on rates?


Published Date: 2020-05-07 | Source: INCE|Community | Author: Mark Ingham

Lower for longer on rates?

In "Lower for longer on rates?" Ingham Analytics poses an interesting question for investors. South Africa has falling short-term interest rates (good for your mortgage repayment, not so good for banks) and higher long bond yields (bad for the government budget deficit).

Amid COVID-19 lockdown, government debt is rising, and GDP is shrinking. So, there is this bifurcated interest rate situation, which is not typical in many countries. But, could this change? Could long rates fall? What are the implications?

Ingham Analytics say the US and Japan offer interesting precedents, among other nations, and give us some useful pointers. There are very revealing graphs.

What lessons can be learned? Ingham Analytics has an answer that may surprise you.

Click here to read this COVID-19 credit markets Insight.