Morgan Asset Management: It is expected that central banks in the Asia-Pacific region will not cut interest rates as quickly as the Federal Reserve. It is recommended to maintain a diversified investment portfolio
Aidan Shevlin, head of Morgan Asset Management's International Liquidity Fund, pointed out that interest rate cuts by central banks in the Asia-Pacific region are unlikely to be as rapid as the Federal Reserve's. He recommends investors to maintain diversified investment portfolios, holding money market funds and ultra-short-term bonds. He mentioned that central banks around the world are facing different interest rate cycles due to inflation and economic factors, while the Fed's policies remain important and have far-reaching effects. Geopolitical tensions and trade relations may bring risks that affect investors' strategies
According to the Wisdom Financial APP, the Federal Reserve will cut interest rates in September. Aidan Shevlin, Head of International Liquidity Fund at Morgan Asset Management, pointed out that although the market has quickly reflected that central banks in the Asia-Pacific region may follow the Federal Reserve in their monetary policy stance, local central banks have not been as proactive as the Federal Reserve during rate hike cycles. Therefore, it is difficult for Asia-Pacific central banks to cut interest rates as quickly as the Federal Reserve, and the extent of rate cuts is also unpredictable. He suggested that investors adopt a more rigorous and flexible investment strategy, maintain a diversified portfolio, hold both money market funds and ultra-short-term bond strategies, which can not only benefit from the rate-cut cycle but also maintain high returns, aiming for higher returns over a longer period.
Aidan Shevlin mentioned that for Asia-Pacific investors, the Federal Reserve's monetary policy is still important, but local inflation, economic, and political situations will also affect local investment strategies.
Aidan Shevlin stated that not all Asia-Pacific central banks have started a rate-cut cycle. The Reserve Bank of New Zealand and the Central Bank of the Philippines have already cut rates, while central banks in Malaysia, Thailand, and India are waiting for action from the Federal Reserve. The Reserve Bank of Australia may maintain relatively high rates for a longer period, and the Bank of Japan has even moved away from a negative interest rate policy and entered a rate hike cycle.
Aidan Shevlin believes that central banks in different parts of the Asia-Pacific region are in different interest rate cycles due to their different focuses on controlling inflation, supporting local economic growth, and avoiding exchange rate fluctuations.
He thinks that geopolitical concerns, escalating trade tensions, and persistent inflation are all risks for the Asia-Pacific region. They may affect fuel and food prices, prompting investors to switch to safe-haven assets. Concerns about tariff increases may disrupt supply chains within the region and weaken export competitiveness. Additionally, a resurgence of U.S. economic growth or inflation could exacerbate market liquidity, making the timing and extent of rate cuts in the Asia-Pacific region more complex