Re-pricing of assets could dampen global recovery, RBA deputy warns
Debelle says equities may be mispriced and says interest rates show “puzzling” features
Some financial assets may be mispriced in global markets, which risks “dampening” recovery worldwide, a deputy governor at the Reserve Bank of Australia said today (March 16).
“If interest rates continue to rise without a similar rise in expectations about future earnings growth, one would expect to see a repricing of other assets, particularly equity markets,” Guy Debelle said.
While such a repricing would not mean “a major derailing of the global recovery”, Debelle said he believes it could
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