Rates heading to 1% or lower
Vimal Gor, Head of Income & Fixed Interest at BT Investment Management, doesn't expect to see inflation picking up anytime soon. With broad-based weakness in inflation, both domestic and tradeable, it would be surprising to see interest rate cuts achieve their objective. "What we're seeing is a global deflation pulse coming across from Asia. I think most countries are unable to control their inflation rate in the short-medium term." Locally, he expects the RBA to "re-engage in the currency wars," and depress the AUD; this should drive rates below 1%, but it will be "a slow delivery." In the short video below, he shares a trade he thinks still works.