The Chief Executive Officer of deVere Group, Mr. Nigel Green has given an expert opinion on the recovery from a coronavirus-triggered recession that will usher in a new era in which how people live, do business and invest will fundamentally change.
According to the CEO of one of the world’s largest independent financial advisory organisations, as consensus grows that a temporary world recession is imminent and as governments and central banks scramble to try and limit the impact, the world is now almost certain that there will be a coronavirus-triggered recession as both global supply and demand are impacted..
He cited the U.S. Federal Reserve, which announced another interest rate cut on Sunday – its second emergency measure this month.
“We can expect this recession to be deep but short. The slowdown will be temporary because it’s not caused by deep-rooted problems and imbalances in the economy, rather by a wholly unexpected shock that’s gripped the world,” said Green.
He noted that every recession produces a new world, stressing this will not be an exception.
Green argued further that Covid-19 recession is likely to fundamentally shift how we live, do business and invest. “We’re moving towards an era of negative interest rates. The second cut of rates, now at zero, by the Federal Reserve – the world’s de facto central bank – suggests that the U.S. could soon join peers in Europe and Japan by adopting negative interest rates.
“Zero or negative rates will help boost financial asset prices and savvy investors will be seeking to top-up their portfolios by drip-feeding new money into the market at this time. They will give more investors more reason to increase their exposure to equities as the money won’t be working for them as cash deposits.”