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Disinflation and the contrarian investor | Ausbiz
There’s no shortage of theories on where the Fed will go next with interest rates. Isaac Poole, global CIO of Oreana, has a somewhat contrarian view as he contemplates why there might be a likely risk of disinflation next year. He doesn’t expect a US recession next year and says it’s likely the Fed will pause sooner than expected and for longer than expected. Isaac says the Fed needs to start preparing its narrative for that to be able to hold rates rather than cut and it will pause sooner than expected and for longer than expected. He says they could slow to 0.25% in December and that makes US equities and government bonds relatively attractive. He says the actual inflation data isn’t quite there to allow the Fed to pause yet, but core CPI inflation will likely slow this week. Meanwhile, Isaac says China equities could rally hard next year as the reopening begins. He says the recent rumours around reopening are probably premature and will cause volatility, but there are opportunities for investors still.
(Source: Ausbiz)
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