The oil price slump and the declining rate of inflation
The slump in the oil price since mid-2014 has seen global inflation rates continue to trend down. European consumer prices fell an annual 0.2 per cent in December 2014 and European Central Bank president continues to “do whatever it takes” by unveiling a 1,100 billion Euro (US$1,250 billion) bond buying program over 2015-2016.
Last week central banks in Denmark, Turkey, India, Canada and Peru all announced surprise rate cuts and the Swiss National Bank shocked investors by abandoning the peg of 1.2 Swiss francs to 1.0 Euro. It seems the Reserve Bank of Australia will likely cut the cash rate from the historically low 2.5 per cent to 2.25 per cent and possibly later to 2.0 per cent over the foreseeable future, accentuating the chase for yield by investors.
The US economic environment, one of the few bright spots globally, has the consensus forecasting the Federal Reserve tightening the Fed Funds rate by 0.25 per cent by September and by 0.5 per cent by December – we wouldn’t be surprised if Chair of the Board of Governors, Janet Yellen, backs off on this view, as 2015 proceeds.
To learn more about our funds, please click here, or contact me, David Buckland, on 02 8046 5000 or at dbuckland@montinvest.com
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Pam
:
Dear David,
The European Bank President comes from the Labor Party of the 1980’s, with a “What ever it takes”, Richo would be proud.
Draghi is trying to revive an ailing Europe. Greece has debt of 197% of GDP, and requires a 390 billion Euro bailout. The new Greek President looks good in Country Road Suits and Blue Van Heusen Shirts. Style over Substance….
Kind regards,
Pam.