Barclays CEO at the World Economic Forum
Jes Staley on market volatility and interest rates
Barclays CEO Jes Staley said, “If interest rates were to move quickly, volatility was to move quickly it could be an interesting financial market in the next couple of years.” He added that this financial situation “feels a little bit like 2006.”
In December 2015, the Fed started its gradual rate hike process and is continuing it in the present scenario. On the other hand, market volatility was low in 2017. The new high in the equity market (SPX-INDEX) (COMP-INDEX) is dragging down the volatility index to historic lows. Volatility and the market generally move in opposite directions.
According to Jes Staley, if interest rates move aggressively, and volatility shows a sudden change, then we might see an interesting period for the equity market in the next two years.
He feels the present financial situation is similar to the condition in 2006. In 2008, the world economy experienced a global financial crisis. However, in 2005 and 2006, the markets were healthy.
In the next part of this series, we’ll analyze Jes Staley’s view on market movement.