Communication key on the US rates cycle

George Boubouras, CIO of Contango Asset Management, says his base case sees rates rising in the US in early 2016, however, communication about rate rises will ultimately be more critical than the actual timing. Boubouras says that to date central banks have been innovative in how they have attempted to stimulate economic activity and are cognizant of the heavy lifting they are doing. In the absence of fiscal support he says they will need to maintain a very clear narrative on their intentions so as not to derail or spook markets. “It is vital that they are very systematic and have a very clear narrative on where they are going and why. To make it clear that any rate rises in the US is all about being very measured. They are clearly behind the curve and that’s a good thing for markets.” In this interview George expands on his thinking around rates and how this will impact Australian equities.