Report
Abnormally low interest rates have erased the concept of fundamental value from financial and real estate markets
We use the case of the euro zone to illustrate out point. When the long-term interest rate plus a normal risk premium is similar to or lower than the growth rate, the discounted value of the future income provided by an asset tends to infinity. Disconcertingly, this means there is no longer any basis for calculating the fundamental value of assets.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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