Skip to main content
logo
  • Investment Strategies

    Investment Options

    • Alternatives
    • Beta Strategies
    • Equities
    • Fixed Income
    • Global Liquidity
    • Multi-Asset Solutions

    Capabilities & Solutions

    • ETFs
    • Pension Strategy & Analytics
    • Global Insurance Solutions
    • Outsourced CIO
    • Sustainable Investing
  • Insights

    Market Insights

    • Market Insights Overview
    • Eye on the Market
    • Guide to the Markets
    • Guide to Alternatives
    • Market Updates
    • Guide to China

    Portfolio Insights

    • Portfolio Insights Overview
    • Alternatives
    • Asset Class Views
    • Currency
    • Equity
    • ETF Perspectives
    • Fixed Income
    • Long-Term Capital Market Assumptions
    • Sustainable Investing
    • Strategic Investment Advisory Group

    Retirement Insights

    • Retirement Insights Overview
    • Essential Elements of a Sound Retirement System
    • Building Better Retirement Portfolios
  • Resources
    • Center for Investment Excellence Podcasts
    • Insights App
    • Library
    • Webcasts
    • Multimedia
    • NEW Morgan Institutional
  • About us
  • Contact Us
  • English
  • Role
  • Country
  • Morgan Institutional
    Search
    Search
    Menu
    You are about to leave the site Close
    J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan Asset Management isn’t responsible for (and doesn't provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan Asset Management name.
    CONTINUE Go Back
    1. Getting real about rates

    • LinkedIn Twitter Facebook
    jpmam-grar-report-hero-banner

     

    Getting real about rates

    The post-war era of substantially positive real interest rates may be gone for good

     

    J.P. MORGAN STRATEGIC INVESTMENT ADVISORY GROUP

    Authors: John Bilton, Michael Buchenholz, Michael Cembalest, Kyongsoo Noh,
    Andrew Norelli, Paul Quinsee, Pulkit Sharma, Mark Snyder, Karen Ward 

    Contributors: Jo Akehurst, Berkeley Brown, Aidan Bush, Katya Chagaeva,
    Jason DeSena, Jakub Kolodziej, Dave Laughlin, Richard Morillo, Katherine Roy, Valerie Stephan,
    Rick Wei, Allison Wiggins, Ritchie Zhang

    Despite our expectations for a sustained strong economic recovery, low or negative real interest rates look set to persist for an extended period of time. At its core, our thesis is based on the expectation that central banks will be unable to shrink their balance sheets meaningfully for fear of political reprisal or a financial shock. For investors, recognizing and planning for prolonged financial repression is key.

    READ FULL REPORT  HEAR FROM OUR EXPERTS

    Why will real rates remain low for years?

    PJCT-0721-AM-623892-strategic-advisory-summary-700x700-03-hr

    There are two reasons we could find ourselves stuck in a low or negative real rate environment:

    1. A weak post-pandemic recovery

    2. An extended period of financial repression

    How should investors respond?

    The bond vigilantes are now outgunned by the bond pacifists, and the real opportunities lie outside of traditional fixed income.

    • Securitized credit: commonly offers amortizing cash flows, and relatively short maturities

    • Equities: US and Europe can contribute meaningfully to returns

    • Real assets: provides stable real yields with potential for cash flow growth during inflationary periods
    PJCT-0721-AM-623892-strategic-advisory-summary-700x700-05-hr

    What does this mean for Pensions and Insurers?

    PJCT-0721-AM-623892-strategic-advisory-summary-700x700-04-hr

    Significant segments of the global institutional industry are particularly sensitive to low-interest rates, but there are strategies for coping with a low-rate environment.

    • Corporate Pensions adopt income-oriented assets, seek credit diversification and increase illiquid assets exposure

    • Public Pensions: look for alternative income and illiquidity to boost returns

    • Insurance Providers: replace some long duration fixed income and public equity by illiquid alternatives

    Helping clients build stronger portfolios

    Learn more about the strategic investment advisory group

    J.P. Morgan Asset Management

    • About us
    • Investment stewardship
    • Privacy policy
    • Cookie policy
    • Binding corporate rules
    • Sitemap
    Opens LinkedIn site in new window
    J.P. Morgan

    • J.P. Morgan
    • JPMorgan Chase
    • Chase

    READ IMPORTANT LEGAL INFORMATION. CLICK HERE >

    The value of investments may go down as well as up and investors may not get back the full amount invested.

    Copyright 2023 JPMorgan Chase & Co. All rights reserved.