Rapid equity market recovery unlikely with central banks’ new strategy – Natixis Equities CentralBanks Banks InterestRate
cenario? In the view of analyst at Natixis, it is difficult to imagine a solid equity market recovery.“Central banks’ new strategy is to raise interest rates moderately and keep them moderately high for a long time, as long as inflation does not return to the vicinity of the inflation target. Given the inertia of core inflation, we should actually expect a long period of moderately high interest rates.
“During this period, the unemployment rate will rise until it exceeds the level of the structural unemployment rate. In this situation of rising unemployment and therefore persistently weak growth, it is difficult to imagine a marked recovery in share prices. The situation was different in the past as interest rates rose sharply and could therefore fall rapidly.”Information on these pages contains forward-looking statements that involve risks and uncertainties.
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