The biggest issue in global macro today
In response to the calamity caused by the GFC, interest rates were cut to near zero and we doubled the amount of debt outstanding. Fast forward and interest rates are now rising at the same time that ~$18 trillion of stimulus is being withdrawn.
Charlie Jamieson of Jamieson Coote Bonds explains in no uncertain terms why he thinks the current macro environment is increasing the chances of a US recession.
"We personally feel that long dated interest rates are going to be pretty sticky from here on... Certainly, we expect more curve flattening. The difference between short dated interest rates and long dated interest rates continue to narrow. That's very important because every time that relationship has got below zero in the last 60 or 70 years, aside from 1967, we've had a recession within 6 – 9 months. We certainly look like we're going to get there pretty quickly."
These comments came as part of a discussion from Livewire Live that focussed on the biggest changes taking place in global macro right now. You can access an excerpt of the discussion featuring Charlie Jamieson from Jamieson Coote Bonds and Vimal Gor from Pendal Group via the video below.
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