Surat Wealth Management：21 Dialogue ｜ Exclusive interview with PIMCO Director Erin Browne： After the interest rate reduction is completed

21st Century Business Herald reporter Wu Bin Intern Reporter Bian Xiao Ran Mumbai Report

At the end of 2023, the market was expected to become a "interest rate reduction year" in 2024. The Federal Reserve had interest rate cuts six to seven times. The Federal Reserve was also loose, but now it seems to be "a dream."

In the first quarter of 2024, the US CPI rose for three consecutive months.The Federal Reserve officials, which are "misjudgment" again, have become more cautious, and only the interest rate cut this year in the June spot map.In the second half of 2024, the Federal Reserve Chairman Powell was also cautious step by step at the parliamentary hearing, implying that the interest rate cut was near, but the point was closed at the specific point.

Recently, Erin Browne, managing director of global bond giant PIMCO (PIMCO), Erin Browne, said exclusive interview with the 21st Century Business Herald that the US inflation rate is decreased at a slow but gradually decreasing rate, but this is a oneThe bumpy road, anti -inflation "last mile" challenge, will not return to about 2%smoothly.

Reflected in monetary policy, Browne is expected to cut interest rates significantly.Historically, the Federal Reserve usually reduces interest rates at about 250 basis points during the interest rate cut cycle, but because inflation will remain at a high level for a longer period of time, and the economy is tough, Browne expects that the interest rate cut may only be about 125 basis points.This means that even if the Federal Reserve has completed interest rate cuts, interest rates will still be in a restricted area.

Looking forward to the future, Brown is optimistic about fixed income investment, thinking that it has both interest income, capital return potential and diversified investment triple advantages.The growth of artificial intelligence and technology giants is a long -term trend. It may continue to lead the market in the next few years, and even maintain a leading position in a longer period of super cycle.In the long run, the 60/40 investment portfolio strategy is still a good investment option.

(PIMCO Director's Managing Director and Multi -Asset Investment Portrait Erin Browne, interviewees) Figures) The Federal Reserve is difficult to significantly cut interest rates

"21st Century": At present, Wall Street has different inflation and economic prospects. Do you think that inflation can return to the target of 2%?Can the US economy avoid recession?

Brown: The inflation rate in the United States is decreased at a slow but gradually decreasing rate. We believe that this is a bumpy road. The "last mile" of anti -inflation challenges the challenge and will not return to about 2%smoothly.We don't think the inflation rate will drop to 2%in 2026, but it will be around 2%.

How does inflation drop to 2%fasterSurat Wealth Management?We think this may be due to economic recession.But in the next few years, economic recession is not the most likely basic situation.The US economic growth is slowing down. It is expected that this year's growth rate will drop to about 2.4%. It may fall to less than 2%next year, but it will still maintain positive growth.

"21st Century": The overall US economy shows toughness, and inflation decreases slower than expected.The market's expectations for the Federal Reserve's interest rate cuts have been significantly reduced compared with the beginning of the year.What are your expectations for the Fed's future monetary policy?

Brown: In the current environment, we still think that the Fed can cut interest rates, but it is not a comprehensive interest rate cut cycle.Historically, the Fed will usually cut interest rates at about 250 basis points during the interest rate cut cycle, but because inflation will remain at a high level for a longer period of time, the economy is tough, this time the interest rate cut may be about 125 basis points.The Fed may begin to cut interest rates once in the third quarter of this year and continue to cut interest rates at the end of 2025 with prudent pace.This means that even if the Federal Reserve has completed interest rate cuts, interest rates will still be in a limited area.The Fed may need about 225 basis points to return to the level of neutral interest rates. Only 125 basis points at interest rate cuts means that monetary policy will still be tight.

"21st Century": From the perspective of an enterprise, what impact does high interest rate have on their financing?What are the risks?

Browne: We just mentioned that by the end of 2025, the Fed's monetary policy will still be in a limited area.The longer high interest rates will cause greater differentiation among the strong and weak in the corporate sector.Those large -scale companies with abundant cash can easily enter the capital market and make financing at a level of attractiveness.But those small companies that rely on bank loans or private market funds will encounter more and more difficulties in re -financing and exhibition.Some areas will encounter greater challenges, such as commercial real estate, telecommunications, media, retail and other industries, facing long -term challenges in growth and business models.The gap between strong and weak people in the economy may increase.The return target of inflation is longer

"21st Century": Some people believe that the inflation rate will never return to 2%due to global anti -winds and other reasons.What do you think?

Browne: Globalization and other factors have led to high inflation and a slower inflation cycle, but long -term inflation expectations are still stable within 2%, so we do not think that the Fed has lost its reputation and will still maintain the inflation rate to gradually gradually gradually increase the inflation rate.Decrease to 2%target.

A few years ago, the Fed did conduct a framework review, which changed their views on the goal of inflation. From the 2%"upper limit" to "average", inflation can be higher than 2%for a period of time, and the economic slowdown can be slowed down for a period of time.In the period, inflation may be less than 2%.In the next few years, inflation will fall to 2%, but the time is much longer than expected and slower.

"21st Century": At present, the market looks more push, and the Fed seems to be more eagle.What do you think of the differences between the market and the Federal Reserve?

Brown: I think the Federal Reserve is not exactly eagle, and they rely on data to make decisions.The Federal Reserve currently has some confidence, but more data requires more data to further enhance confidence in interest rate cuts.

The Federal Reserve ’s June line map is expected to cut interest rates once before the end of the year, which is quite close to the current two interest rate cuts at the current market.The market is a bit optimistic about the faster interest rate cut cycle, but the differences are not much.Earlier this year, the Federal Reserve is expected to cut interest rates at two to three times, and the market is expected to cut interest rates six to seven times.Now we have seen that this difference has been narrowed, and the forecast of the market and the Federal Reserve has become consistent.Artificial intelligence boom is expected to continue to lead the stock market

"21st Century": In recent years, the 60/40 investment portfolio strategy (60%of the shares, 40%bonds) was once questioned.Is it still a good investment strategy?How should investors allocate their assetsNagpur Stock?

Browne: In the past two decades, the average annual return rate of 60/40 investment group strategies has exceeded 10%. This year is expected to have similar performance.The environment in 2022 was very special. The Federal Reserve quickly increased interest rates in response to high inflationJaipur Investment. The performance of stocks and bonds was not good. The 60/40 investment portfolio strategy was impacted.However, in an environment where inflation is stable or even decreased, the 60/40 investment portfolio strategy may be well performed.In the long run, the 60/40 investment portfolio strategy is still a better investment option.

"21st Century": The Nasdaq Index has reached a record high this year. Under the boom of artificial intelligence, the science and technology giants such as Nvidia, Microsoft and Apple performed well. Can it continue to lead the market in the future?

Brown: The growth of artificial intelligence and technology giants is a long -term trend, a periodic trend, and has vitality. It may continue to lead the market in the next few years, and may even maintain a leading position in the longer super cycle.Even for the Nivioida, which has soared in recent years, the current expected price -earnings ratio is basically the same as three or five years ago. The company's profitability has been growing, and this situation may continue.

We are at a turning point.At present, the demand for artificial intelligence investment is very large, especially in the fields of data centers, power supply, and infrastructure required for construction and drive data centers.At present, products such as Nvidia and other companies are in short supply. They are about to launch many new products, which will continue to support profit growth, and more companies will benefit in the future.Compared with other fields, artificial intelligence has more room for growth.Fixed income investment has both three advantages

"21st Century": Fixed income now seems to be attractive.What do you think of future fixed income investment prospects?Which regions have more investment potential?

Browne: We have transformed from an environment without stock substitutes to an environment with stock substitutes. At present, investment fixed income has three major advantages.First of all, fixed income assets have considerable interest returns, and the initial yield level of core bond assets is very high, exceeding 5%.The second is to obtain the potential of capital returns from fixed income assets. Some developed countries and emerging market central banks have begun to cut interest rates. The Fed will also cut interest rates later this year, and the price of fixed income assets is expected to rise.Finally, the potential of diversified investment outside the stock. As inflation decreases, stocks and bonds return to traditional negative relationships, which also supports more fixed income assets in the investment portfolio.

After risk adjustment, fixed income assets actually look more attractive than stocks.From the perspective of regions, compared to the United States, the interest rate reduction cycle of developed markets outside the United States may be faster. Therefore, we are more inclined to hold fixed income assets in markets such as Canada, Australia, Britain and other markets, not the United States.

"21st Century": This year's stock such as stocks and other risk assets and gold assets such as gold rose at the same time.What do you think of this phenomenon?Why is the actual interest rate, why is gold still performed well?

Browne: On the one hand, the performance of the stock market has always been very good and constantly reached a new high.The US economic growth is tough, and Wall Street has also revised the expected profit expectations of corporate corporate and the target of the stock market.On the other hand, the price of gold has also refreshed historical records many times.People will seek physical assets during the high inflation period, and gold is a method of wealth storage in a high inflation environment. It is regarded as an anti -inflation asset and is also a hedid asset.In addition, the central banks and large sovereign wealth funds of many countries are also increasing their holdings of gold to achieve diversified assets.

Although the actual interest rate is high, this year's gold has reached a record high this year, and it may rise in the future.As long as the trade tensions between the United States and other countries exist, the demand for gold will exist.Many countries are looking for reserve assets that can store wealth and diversify the risk of the US dollar. Gold is one of the beneficiaries.Digging Indian investment opportunities

"21st Century": At present, there are some differences in the view of the Indian capital market. Some people are optimistic and pessimistic.What do you think?Which industries have more opportunities?

Browne: India's growth is expected to reach 5%of the target in 2024, partly due to the recovery and growth of Indian exports.The future challenge is that the trade growth engine in 2025 may face the uncertainty of the global political environment. Next year, India may need more financial stimulus measures, especially for Indian consumers' stimulus measures to inject momentum into economic growth.

The biggest constraints facing India now come from the real estate industry, and investment in related fields needs to be considered.Compared with other regions of the world, the Indian technology industry valuation is very cheap, and parts manufacturers that promote the growth of Indian exports are very attractive.In addition, with the maturity of the Indian economy, those industries that build and support the social security system in India are expected to benefit, and they are attractive in the long run.International investors need to pay attention to the industries invested by the Indian government, rather than those who are shrinking investment, and high -tech industries such as artificial intelligence will have more opportunities in the future.

"21st Century": The 2024 American election became the focus of the world. What do you think of the influence of the US election?Maybe there are certain certainty trends?

Brown: We believe that the largest loser in the United States will be the US finance.The question is not whether the fiscal deficit will increase after the election, but how much the fiscal deficit will increase.No matter who is under the leadership, the US fiscal deficit is expected to worsen.

No matter who is elected, we may see more tariffs. The Democratic government may use tariffs and export controls in tactics. The Republican government may use tariffs strategically.Tariffs and 100%tariffs on cars made in Mexico, North American Free Trade Agreement may have to rewrite or reorganize.