Share markets around the world can rejoice as it seems to be almost set in stone that interest rates are all set to stay low all the way through to 2015. It can be said with certainty that interest rates will be minimal in the US going on to next year. This fact is sure to promote growth and development in share markets all around the world. It will firmly establish shares as a better and more viable financial and investment instrument than fixed interests or liquid cash.
Recent Trends
One sure way to know if the market is on a high is to look at the number of takeovers in the current quarter. In the January-March quarter, the value of takeovers was seen to be almost twice the level where it was just a year ago. A significant highlight of this trend has been the proposed takeover of David Jones by the South Africans. David Jones controls some of the most high profile commercial properties in Australia. Its takeover can be seen as a sign that market sentiment is right for investment.
In the last Federal Reserve Board meeting, any chance of a rise in interests has been all but ruled out. The minutes of the meeting reveal candidly that there was a general consensus that rates should stay down and any increase in rates should be delayed until there are sufficient causal factors to demand it.
It has been seen very clearly that interest rates can naturally stay down without the need for external interference, as the trends show that US bond yields have been steadily falling. There has been considerable rise in the value of the Australian Dollar- a welcome event that would attract more international buyers into the Australian market and further improve economy, while ensuring that interest rates stay at a sluggish level.