Record-Low Interest Rates To Persist
In comparison to the SARS epidemic in 2003, China makes up a larger part of the global economy now. With millions of mainland Chinese workers under weeks of travel 'lock-down', lots of business activities and industrial production have ground to almost a halt. China's economy was already weakened by a year-long trade war against the US prior to the coronavirus outbreak. The ripple effects of a sharp economic slowdown in China would be felt by the rest of the world in 1H2020. The Chinese central bank is expected to do 'whatever it takes/costs' to prop up the economy in 2H2020 by cutting interest rates and pumping liquidity into the system. Other major central banks in Europe and Japan are also expected to keep their rates near rock-bottom. Germany and Japan even have negative-yielding bonds. Under such a scenario, the US Fed is unlikely to hike rates...