Part 1: Low Rates, Assets Inflate

In this two-part Whitepaper series, we consider the likely drivers of low interest rates that are currently being observed, particularly around demographics, indebtedness, technology, globalisation and the structure of the international monetary and financial system.

By Andrew Macken, Christopher Demasi & Amit Nath


In one sense, the position in which the western world finds itself today – with historically low interest rates, including many bonds trading with negative yields – is no different to the position we have observed over the last decade. But, in our view, one very important thing has changed. Up until late last year, most market participants – including investors and policymakers – believed the environment was temporary.

The fourth quarter of 2018 challenged this belief. Indeed, the fourth quarter of 2018 demonstrated this environment was much more likely to be the status quo for a protracted period of time.

We have identified five key structural drivers of the low interest rate environment we are observing today. These drivers are affecting all economies to some extent and, we argue, a number of major global economies to a severe extent.

Click here to DOWNLOAD the first part of this two-part Whitepaper series and explore our outlook on the direction in which the global interest rates are heading.