Brentwood Group believes central banks should ignore increasing calls for interest rate cuts according to a source close to the Asian-based wealth management firm.
Brentwood Group’s stance is reportedly based on the premise that central banks are already adding unprecedented levels of liquidity to global money markets and token cuts of 50 basis points will not persuade banks to begin lending to each other and, in the case of the US, only exacerbate the potential for an unwinding of the treasury bond market.
Brentwood Group believe the world’s central banks will, indeed, respond to vested interests and begin to cut rates if the wholesale sell-off in equity markets persists.
Interest rates in the Eurozone remain at 4.25% whilst those in the US are at 2%.
