We are living in an unprecedented era of negative nominal rates, exacerbated by a global pandemic. Yet history does offer examples of long periods with negative real rates. Investors can learn from the past, understanding how history repeats and how today’s situation is different from anything we have seen before.
Policy makers have changed the micro structure of markets so that both transactional and collateral liquidity, rather than leverage, are set to test the system in the current economic crisis. Today’s investors will need to adapt to a world of distortionary low interest rates, liquidity shortages, and market volatility. This new world brings risks and opportunities.
This is an archived recording of a live webinar that took place on 22 April 2020.