Publications

- February 1, 2015: Vol. 9, Number 2

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Rising to the rate: Interest rates can only go one way, up. But when and how far?

by Lauren Parr

1 For global investors of all persuasions there is one great certainty: interest rates will rise at some point. Since the recession, western governments have maintained rates at exceptionally low levels — in most countries, close to zero — so there is only one way that they can go and that is up. Beyond this little disputed fact, “it’s nebulous,” acknowledges Joe Valente, head of real estate research and strategy at J.P. Morgan Asset Management. Multi-asset investors work off various assumptions about how the different macroeconomic scenarios across Europe might play out in order to decide what allocation strategies to pursue. Of direct and immediate impact on investors are potential interest rate movements and/or monetary policy changes, and for this reason interest rates remain under careful watch. Where are we at? The major world economies are on increasingly divergent paths. The US Federal Reserve is expected to be t

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