With the Fed on the precipice of another rate cutting cycle, markets face two potential scenarios, explains Charlie Jamieson, Chief Investment Officer at Jamieson Coote Bonds. In the first scenario, the Fed’s rate cuts are just “insurance” – similar to ’87, ’95, and ’98 – and asset markets move ahead relatively unscathed. The second scenario, however, is far less rosy:
“If it’s something darker, like 2000, 2007, or 1989, then we’re going to need material interest rate cuts. In those cycles, we’ve needed 300 to 500 basis points of interest rate cuts, but now we’re starting with only 250 available.”

In the video below, Charlie explains what will lead the economic cycle, and why one or two rates cuts won’t be enough to do the job.

More from Charlie Jamieson

This video is an excerpt from a longer interview with Charlie. Read an edited transcript of the full interview here.

Avoid getting caught in the trap

As we continue to face volatile market periods, bonds will offer the stability of principal and income, as investors seek the highest quality investments. Click contact below to find out more or visit Jamieson Coote Bonds website for further information.