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Deflation and Interest Rates – Is it good news for investors?

China is currently in deflation, and the world is watching with bated breath. Interest rates issued by central banks are at an all-time high. Despite this, there are potential opportunities for investors.

Will Central Banks cut interest rates within 12 months?

Nigel Green of the deVere Group says he expects “central banks, including the Fed Reserve, the Bank of England, and the ECB, to start cutting interest rates within the next 12 months. There are trillions invested in fixed-rate returns right now. That money will mainly go into the stock market when interest rates fall. We have a 17-year high for interest rates. I think investors should split investments between good fixed and quality stocks before the wall of money hits those stocks. Investors should consider now the prospect of inflation falling faster than many have anticipated to seize the opportunities and mitigate risks.”

He goes on to say that with China, a bit of deflation is good for the global economy, as when China’s economy picks up, you will get green shoots of the economy recovering fast in particular areas. It can already be seen with AI, and other sectors should follow suit in the coming year.

China has the potential for future investment opportunities, as do countries where interest rate cuts are imminent.

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