Watch: Interest rates going down and down
*Watch the full interview in the video player above*
Kiwibank’s chief economist Jarrod Kerr predicts interest rates are set to fall again and stay low for the next five years.
In this discussion with the bank’s head of financial markets, Peter Hunt, Kerr says lower interest rates in the United States are driving rates down around the world.
“Ten-year US government bond rates have nosedived since the 3.25 percent peak late last year.
“At just 2.08 percent today, the yield looks to be on a course back towards the 2016 (Brexit-induced) low of 1.35 percent. The global outlook has worsened, inflation is still missing, and Friday's US payrolls disappointment has only fuelled calls for rate cuts."
Kerr and Hunt say that “where US interest rates go, the rest of the world follows”.
“We are seeing a race to the bottom,” says Hunt.
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