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Former Chief Economist at Goldman Sachs Group, Jim O'Neill, predicts that major central banks will need to maintain interest rates around 5% for a longer duration than expected by the market, "even as inflation subsides".

O'Neill supports the idea of sustaining rates at around 5% to keep long-term economic stability and manage the effects of the accumulated stimulus. He disagrees with the notion that interest rates should automatically decrease for a more balanced world, "they should have some sort of positive relation to the level of inflation
if we want it to be permanently stable", O'Neill said.

With inflation at a 40-year high, investors should be prepared for the possibility of higher interest rates for a longer period of time than expected, and they should consider investing in alternative assets to protect their portfolios from inflation and other risks.

Read the full CNBC article here: https://www.cnbc.com/2023/08/10/veteran-economist-jim-oneill-says-interest-rates-should-stay-around-5percent-for-longer.html

A loss of approximately $3 trillion in value has been experienced by the global stock markets this month.

The S&P 500 index, Europe's Stoxx 600, and China's CSI 300 collectively lost around $2.8 trillion. According to the Financial Times, the shifting sentiment is attributed to a confluence of negative factors, including poor Chinese economic data, rising US borrowing costs, and concerns about local and foreign real state markets.

Yields on bonds have risen, affecting equity valuations, and bearish put options are currently outnumbering bullish call options, suggesting a degree of investor caution.

Additionally, Morgan Stanley predicts a 10% fall in European Stocks due to higher interest rates and tighter credit conditions. In the US, there is concern that tighter monetary policy might eventually impact economic growth and lead to a mild recession.

Read the full article here: https://www.ft.com/content/8894946c-0b0b-4f6c-8e2b-cd18fbbd73c6

According to the Financial Times, high borrowing costs, stringent income requirements, and the need for substantial deposits are pushing middle-class individuals and entire families towards renting rather than buying homes.

The lack of available housing is exacerbating the situation and home seekers can no longer justify paying over £1,000 for a room especially if it's not going towards a mortgage, leading to overcrowding and homelessness in some cases.

Efforts by governments to control housing costs, such as rent control policies, have backfired on the real state market and led to preemptive rent increases by landlords.

Rental markets across Europe are expected to remain tight; "rising construction costs, development challenges, and increasing debt costs" will continue to contribute to the limited housing inventory and increase in rental prices.

Read the full Financial Times article here: https://www.ft.com/content/2748d160-03ee-433c-b822-6c07918d1797