Report
What if long-term interest rates normalised?
L ong-term interest rates have risen sharply since the start of 2022 on the back of the rise in expected inflation and the increasingly aggressive stance of central banks, which claim to want to combat inflation. The question now is whether or not long-term interest rates will rise to a level where one could talk of a normalisation of interest rates. If this is the case, then we should expect: A weakening of housing and corporate investment; A sharp fall in investor demand for risky and illiquid assets (infrastructure, private equity, equities, High Yield, private debt, peripheral euro-zone country bonds), which were attractive when risk-free interest rates were very low; A downward correction in the prices of long-term assets (equities, real estate), which can then no longer serve as inflation hedges.
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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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