Saturday, July 26, 2025

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Interest Rates

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June 2025 snapshot: another great month (and financial year) for shares and diversified investors

Investment & Wealth MgmtFinancial MarketsInterest ratesInflationAustralian shares International sharesCommodities

Another month of strong gains on global share markets, across almost all industry sectors. Gold and oil prices spiked briefly after the US bombing of Iran, but receded by month end. Industrial commodities are mostly down on global slowdown fears plus over-production. Bond yields are down on global slowdown fears, and the US dollar continues to slide as per plan. For the 2024/5 financial year, diversified growth/balanced portfolios posted another year of above-average double-digit returns, despite all of the dramas and scares during the year.

Jul 01, 2025 2

US Government has previously defaulted on Treasuries. They are not entirely risk-free!

Government – deficits, debtInflationInterest ratesBonds

As the US government teeters toward yet another debt crisis, it is useful to remember that US government defaulting on Treasures is not new. The US failed to pay maturing treasury bills three times in 1979 when Congress didn't legislate to raise the debt ceiling in time. The creditors sued for unpaid interest but were denied by the Courts. These were 'temporary' defaults and were rectified quickly (the principal, not the interest), but they shocked people who had believed the US government would always pay its debts. The default crisis was a final nail in the coffin for Jimmy Carter and Keynesianism, paving the way for the 1980s boom under Reagan with the revival of free market capitalism. Are we at another turning point now? Today, the US deficit and debt load are more than THREE TIMES WORSE (relative to GDP) than in 1979.&

Jun 12, 2025 2

May 2025 snapshot: Shares rebound + the latest on inflation, rate cuts, and the TACO trade

Financial MarketsInflationInterest ratesAustralian shares International shares

Share markets surge back in May after three negative months under Trump.  My base case scenario - 'TACO' (Trump Always Chickens Out) is on track. (I didn't come up with that name - I wish I had!) Moody's strips the US government of its Aaa credit rating and shares surged, just like they did after the S&P downgrade in 2011. Labor wins 'landslide' election in Australia (how 34% of the primary vote is a landslide is a mystery to me) - so it's all systems go for even more government spending and 'tax-the-rich!'

Jun 01, 2025 2

My latest webinar for IFPA- Elections, inflation, rate cuts, shares, Trump: is there a grand plan?

Government – deficits, debtInflationInterest ratesAustralian shares International sharesAsset allocation, portfolio construction

Here's my latest webinar for the IFPA's Investment Insight series from 9 May 2025. It's a rollicking romp through some critical issues facing long-term investors in these exciting times.  Topics include - elections - productivity - inflation - rate cuts - share market action & valuation levels - and the dreaded 'T' word! Is there a grand plan behind Trump's frenzy of policies?

May 14, 2025

April 2025 snapshot- Share markets ended around flat in April - did I miss anything?

Commodities & MiningFinancial MarketsCurrencyExports, tradeInterest ratesInflationInternational shares

  Big moves in share and bond markets with Trump's 'reciprocal' tariffs, then their sudden deferral a week later. More rebounds, or more falls ahead? Big moves also in currency markets - Trump talking down the dollar is working. Will Trump's tariffs bring inflation or recession, or both? Why tariff-induced price rises are not necessarily 'inflation'. US GDP contraction + updates on commodities, gold, bitcoin, inflation, interest rates, credit.

May 01, 2025 4

Company insolvencies highest in 35 years - and we’re not even in ‘recession’ yet!

EconomicsAustralian economyRecessionsInterest ratesInflation

Company insolvencies in Australia have soared back to levels not seen since the deep 1990-1 recession. Business is doing it tough - on recession footing already. But the rapidly expanding government sector is doing fine - accounting for almost all of the growth in jobs and economic 'activity' (and artificially suppressing inflation and unemployment numbers), while businesses suffer. 

Apr 09, 2025

March-2025 - Snapshot: Trump Slump continues - What's moving markets and why?

Financial MarketsInvestment & Wealth MgmtInterest ratesInflationAsset classes, asset class returns

  Here's my monthly wrap-up of global financial markets for Aussie investors -  Share markets are down - but how serious is it? Currency markets - big moves are afoot. Can Trump talk down the Dollar? Where is the 'safe haven' money going - if not into bonds or US dollars? Updates on inflation, interest rates, recession fears, and plenty more.

Apr 01, 2025

January 2025 snapshot: Trump’s pro-growth agenda boosts shares + ChatGPT’s effort- which is better?

EconomicsFinancial MarketsInflationInterest ratesAustralian shares International shares

Here's my monthly wrap-up of financial markets for Australian global investors. What moved markets and why? plus I get ChatGPT to write the same report - let me know which is better! OpenAI founder Sam Altman says ai will replace humans in 868 days time - am I worried? 

Feb 02, 2025 6

Cash rates are already too low to contain inflation - why central bankers are in a pickle

EconomicsInflationInterest ratesMoney

The tremendous 2-year rally in share markets (even after this week's mini-fall) has been based on the assumption of several more rate cuts soon. Even if inflation is back to target (it isn't yet), current cash rates are already too low to contain inflation in Australia, the US, and other markets, Be careful what you wish for - the only reason for rapid rate cuts would be a sharp recession - and nobody wants that!

Dec 20, 2024

October 2024 snapshot: shares & bonds fall as Trump takes lead in polls

Financial MarketsInflationInterest ratesAsset classes, asset class returns

Here’s my snapshot on global markets for Aussie investors – including my Top 5 factors moving markets. What is the big policy difference between Trump and Harris that is moving markets?  Why have gold and bitcoin been the best asset classes this year?  Will the Fed and RBA cut rates this week?  

Nov 04, 2024

September 2024 snapshot: Fed’s first rate cut + China stimulus boost markets – is it enough?

Commodities & MiningFinancial MarketsChinaInflationInterest ratesAustralian shares International shares

Here’s my quick snapshot on global markets for Aussie investors Essential 1-page chart covering share markets, cash rates, bond yields, and FX + my Top 5 factors moving markets

Oct 01, 2024 4

Gold price pointing to US inflation rising next year - the Fed may not be done yet!

InflationCommoditiesInterest rates

Gold has been the best performing asset class this year, but what is it saying about the outlook for US inflation?   It is pointing to rising US inflation in the year ahead, so the Fed may not be done yet with rate hikes. This would be bearish for US and global share and bond markets.   How does this sit with fears of recession in the US? Why I'm still bullish on US shares and gold - for now.

Sep 23, 2024

Let the US rate cuts begin! Usually good for shares, but it will NOT be plain sailing!

InflationInterest ratesInternational sharesRecessions

In rate cut cycles, shares have usually posted higher returns, but also higher volatility The big issue is inflation - has it been solved or will it revive like in past cycles? With monetary policy now being eased, can we rely on Trump or Harris for fiscal restraint to contain inflation?

Sep 18, 2024

5 Reasons the RBA is not cutting rates like the rest of the world - Why I'd rather NOT see rate cuts

EconomicsFinancial MarketsAustralian economyInflationInterest rates

Several other countries are into their second rate cut already - why hasn't the RBA cut rates yet? Here are 5 fact-based reasons When will we get rate cuts here? Why I am NOT looking foward to rate cuts!

Sep 14, 2024

August 2024 snapshot: Shares hold up - still waiting for US rate cut(s)

Financial MarketsInflationInterest ratesAustralian shares International shares

My essential quick snapshot for Aussie investors What happened in investment markets and why? Who were the winners and losers in global and local share markets?

Sep 01, 2024

April 2024 snapshot - rate cut hopes finally dashed - is this the big one?

International sharesBondsAustralian shares Asset classes, asset class returnsInterest ratesInflation

Here is my essential 1-page snapshot for Aussie investors - covering Australian and US share markets, short- and long-term interest rates, inflation, and the Aussie dollar. Share and bond markets fell back a little as investors finally realised that central banks are not going to cut rates hard and fast.  'Is the is the start of the big correction?' - or 'Are we done for now?

May 02, 2024

Company insolvencies up 100%! - 3 reasons not to panic

RecessionsAustralian economyInterest rates

Yes, company failures are up 100% - but here are three reasons not to panic Insolvency rates tell us about the Business Cycle - Where are we now? Where to next? Which industries are under most pressure? Why the next recession will see fewer company failures than past recessions Why I'm bullish on Aussie companies as a whole, recession or not

Mar 21, 2024

January 2024 snapshot - shares climb on hopes of early rate cuts as inflation falls

CryptoInternational sharesAustralian shares Interest ratesInflationAustralian economy

January 2024 snapshot - shares climb on hopes of early rate cuts as inflation falls.  Essential 1-page snapshot for Aussie investors – covering Australian and US share markets, short- and long-term interest rates, inflation, and exchange rate.

Feb 05, 2024 2

What drives the Aussie dollar? – Part 1: Interest Rate Differentials

Australian economyInterest ratesInflationCurrency

Every day (in fact every minute of every day and night) the value of the Aussie dollar jumps around, seemingly at random.

Dec 08, 2023

Australia-v-rest of the world on Inflation & Interest rates. RBA is lagging and has more work to do

Interest ratesAustralian economyEconomicsInflation

Today (25 October 2023) the latest inflation figures for Australia were released (for the September quarter). The news was mixed – quarterly inflation rose from 0.8% to 1.2%, but the annual rate (rolling 12 months) fell from 6.1% to 5.4%. Meanwhile the cash rate has been sitting at 4.1% since June, after twelve rate hikes.

Oct 25, 2023

Last time we had an inflation-busting rate-hike Recession – shares surged! This time is Different –

InflationInterest ratesRecessions

Nothing scares investors more than news of a ‘recession!’ But why? Recessions have mostly been good for Australian shares! That’s right. Contrary to the popular myth that recessions are bad for share markets, in the vast majority of economic ‘recessions’ in Australia over the past 150 years, the local share market has actually risen!

Aug 28, 2023

"I read all of Ashley's research on financial and economic issuess. His data resources, deep knowledge, and original analysis put him in a class of his own."

Ian Macfarlane AC - Former Governor, Reserve Bank of Australia (Australia's central bank), 1996-2006. Former Director, Woolworths, Leighton Holdings, and ANZ Bank. Also on the International Advisory Boards of Goldman Sachs (2007-2016),  the China Banking Regulatory Commission (2011-2014), and director of the Lowy Institute for International Policy (2004-2017).

“Over the past 20 years, Ashley has been an invaluable assistance to me, as a reliable source of unbelievably strong and interesting data, and many good investment ideas.” 

"The depth and quality of Ashley’s research and analysis of investment markets is the best in the business.”

Dr Don Stammer - Australia’s most respected economic writer, commentator, and speaker for the past 40 years, with a distinguished career including the Reserve Bank of Australia, Chief Economist at Deutsche Bank Australia for 21 years, chair of nine ASX companies, plus numerous non-listed and not-for-profit boards.

“What sets Ashley Owen’s analysis apart from investment banks and the financial press is his deep fact-based understanding of long-term financial data, rather than getting caught up on the daily noise over issues that may generate trades or sell newspapers today, but will be irrelevant and misleading two years from now.” 

Hugh Dive, CFA. Chief Investment Officer, Atlas Funds Management, and frequent expert commentator quoted in the AFR.

‘For many years, Ashley has been my go-to source of information and analysis on what’s going on in financial markets and why.’

“Ashley has an encyclopaedic knowledge of the markets – I call him Mr Google!”

Noel Whittaker, AM – Australia’s best-known personal finance writer, columnist, and media commentator for the past three decades. He has written more than 20 books on personal finance, his regular columns on personal finance are published in almost every major Australian newspaper, and he appears regularly on radio and TV as an expert on finance and investing.

“Ashley’s unique fact-based analyses and insights into Australian and global markets are always worth reading. He has an incredibly deep and comprehensive store of financial markets data.”

Chris Cuffe, AO – One of Australia’s best known and most experienced investment managers – former CEO of industry giants Colonial First State, then Challenger Financial; founder and Chair of Australian Philanthropic Services, and Third Link Growth Fund; current/former chair, director and/or investment committee member of numerous funds including UniSuper, Argo Investments, Hearts and Minds Investments, Paul Ramsay Foundation, and many others.

“Ashley is one of the best writers and thinkers on financial markets in Australia. His unique analysis and research is always fact-based and insightful, not the usual uninformed market noise and waffle that infects the mainstream financial media.”

Graham Hand - Editorial Director of Morningstar Australia, including Founder/Managing Editor of FirstLinks, Australia’s leading newsletter and publishing service on wealth management, superannuation, and personal finance.

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The information contained in this document relates to historical, factual events and returns, and contains general commentary and observations about financial markets, asset classes, and asset allocation. This document, or any part thereof, does not, and is not intended to, constitute investment advice, or financial advice, or financial product advice, in any jurisdiction in which it is published, re-published or read. It does not recommend, encourage, or influence readers to buy, hold, sell, or deal in any financial product or security. Where securities of financial products are mentioned, it is purely for the purposes of illustration, context, and/or education, and not intended to influence anyone to buy, hold, sell, or deal in it. The information is current when written. All reasonable measures are taken to ensure its accuracy at the time of publication, but the author accepts no responsibility or liability for any errors or omissions. This document is only provided to, and intended for, holders of Australian Financial Services Licences. It should not be used or relied upon by any person or entity other than a duly licenced AFSL holder, or authorised representative thereof. The author receives no benefit, financial or otherwise, from any product provider, or product issuer, or any other firm involved directly or indirectly in the provision or services in or to financial markets or industries, whether mentioned in the report or not. Any opinions expressed by the author are his alone, and are intended for the purposes of education.