Fed rate cuts, ‘reverse globalisation’ may spur relatively undervalued Singapore, Asian stocks

ABOUT a year before the pandemic struck, the chief investment officer of a Swiss private bank offered me a rather dystopian analysis of the global economy during an interview.

He told me the widespread use of technology had made it harder for workers in the US to demand higher wages during the preceding couple of decades. With stagnating middle class incomes, demand had been increasingly fuelled by rising asset prices and borrowings.

He added that limited upward pressure on wages had also paved the way for a long-term decline in inflation and interest rates. This further fuelled asset prices and enabled everyone to borrow even more.