How Do You Invest in the World? - Real Time Insight

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In this Real Time Insight post --I share with editors and subscribers alike-- fresh interest rate forecasts I acquired from Consensus Economics in London.
 
First, Five Advanced Country Short Rate Forecasts.  

The survey dated May 2014.
 

Short Term Interest Rates  
  Latest 12 Months Rate Rise
Canada 0.9 1.1 20 basis points
Euro zone 0.3 0.3 No Change
Japan  0.2 0.2 No Change
U.K. 0.5 0.9 40 basis points
U.S.A. 0 0.3 30 basis points

Key takeaways?

Number One:  Euro Zone and Japan economies will not be strong enough to sustain monetary policy rate hikes in 2015.
 
Number Two:  Canada, the U.K., and the U.S.A. economies will be strong enough to support 20 to 40 basis points higher short rates in 2015. This is equal to a 0.2% to 0.4% rise in short-term interest rates.  Use 60-day bank CD rates as a proxy.
 
Second, Seven Advanced Country Long Rate Forecasts.


Long Term Interest Rates
  Latest 12 Months
Canada 2.4 3.2
Germany 1.5 2.2
Spain 2.9 3.6
South Korea 3.5 4.0
Japan  0.6 0.9
U.K. 2.7 3.3
U.S.A. 2.7 3.5
 
Key takeaways?
 
Number One:  South Korea will have the highest long-term interest rate in 2015.

Number Two:  Spain and the U.S.A. will be the next tier, for different reasons.  Spain will have a higher risk premium.  The U.S.A. will have a stronger economy in 2015.

Number Three:  Canada and the U.K. are just behind the U.S.A. in 2015.

Number Four:  Germany and Japan will have the lowest long-term interest rates.  This is mostly due to weak consumer inflation rates.
 
My RTI Question:  Based on Fresh Rate Data, How Do You Invest in the World?


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