Spectrum Asset Management’s Damien Wood discusses the implications of reversing the ultra-easy money by central banks.
Years from now, when historians look at the “big ease” after the “great recession” of 2008, we suspect the reviews of some central bankers of the recent era will not be favourable.
Slashing interest rates and hammering bond yields well below their market levels has certainly provided stimuli to economies and asset prices.
The global economy is currently expanding at around a reasonable 3.7%. This recovery, however, has come at a cost. Now, we have the dual dangers of elevated valuations and greater indebtedness than before the GFC.