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Interest Rates: Defensive Asset Fails

• Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner

Following on from Friday’s fixed term deposit rate update, the situation is just as bad in the United States.

Over the past 200 years, interest rates in the United States peaked at 15.8% in September 1981 and have now fallen to an all-time low of 0.5% in August 2020.

Click for chart.

The US Federal Reserve does not anticipate an interest rate increase until 2023.

Using cash and or fixed term deposit as a defensive asset solution no longer makes any sense.

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