The Great Disagreement – an important update

Today there is a “Great Disagreement” as to where US monetary policy (and hence US interest rates) is headed over the next three years or so. In one corner is the Fed which is anticipating a normalisation of the US economy and US monetary policy (and hence higher interest rates) over the next three years or so. In the other corner is “the market” which is effectively pricing secular stagnation with prolonged lower inflation and growth (and hence lower interest rates). In our view it is unusual to see such a fundamental and important disagreement between the market and policy setters. In our view, if the Fed is right, many assets are mispriced at the moment and a normalisation of US monetary policy could lead to material losses for investors. The scale of this disagreement is staggering. Watch an interview with Hamish Douglass here: (VIEW LINK) or read the full article titled 'The Great Disagreement - an important update' here: (VIEW LINK)

Magellan was formed in 2006 by Hamish Douglass and Chris Mackay, two of Australia’s leading investment professionals. The company specialises in global equity and listed infrastructure assets.

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