News Archive
Ian Williams highlights core issue for gilt market in an appearance on Bloomberg TV
Responding on to the first failed gilt auction in nearly seven years, Strategic Gilt Fund manager Ian Williams explains that this particular failed auction ought to be viewed more as a reflection of the market’s sentiment regarding longer-dated gilts, rather than to all gilts.
After the announcement of quantitative easing, the market may have become overly concerned with the logistics of implementation, and temporarily lost sight of the long-term implications of such policies. The failure of an auction of longer-dated gilts represents a recognition on the part of the market of the inflationary pressure that quantitative easing could spur down the road.
Deflation is now yesterday’s story, and quantitative easing simply the authorities’ response to it. The core issue remains the sheer scale of the government’s borrowing requirement and the identification of a proper balance between gilt issuance and quantitative easing.
- View the Bloomberg TV video