Mark Mobius, known as the “Godfather of Emerging Markets,” warned U.S. interest rates could soar to 9% amid the Fed’s fight against inflation, and revealed he was putting money into Taiwan, India wait for the market.
Mobius Capital Partners co-founder Mobius said on Monday (17th): “If inflation is 8%, if you go according to the playbook, then you have to raise interest rates above inflation, which is 9%. “Policymakers may not raise rates so aggressively if consumer prices soften, but Mobiles doesn’t think inflation will subside anytime soon.
Mobile’s forecast may refer to the Taylor Rule, which measures price pressures and the labor market to give the best policy rate. The U.S. consumer price index (CPI) for September was higher than expected last week, putting more pressure on the Fed. Even though the Fed has raised interest rates several times, other inflation measures remain high.
His warnings have gone far beyond what the Fed and interest rate markets are currently thinking. Traders expect U.S. interest rates to peak at around 5 percent in March next year.
Mobiles also called on investors to be cautious about commodities as demand from some key buyers may cool.“Currencies in the hands of commodity buyers are depreciating day by day, and you may see commodity prices fall,” he said, referring to emerging markets andEURarea buyers.
Mobiles also revealed that he is putting money into India, Taiwan and Brazil, as well as Turkey and Vietnam, and called on investors to be cautious about companies with higher debt and lower returns on capital.
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