Central Banks Will Focus On Balance Sheet Unwinding Over Rate Hikes, Says Ashmore

Central banks globally are unlikely to take a strong directional stance on the debate over balance sheet unwinding and raising interest rates just yet as they wait for more incoming data, according to Jan Dehn, head of research at Ashmore Investment Management.

Dehn is not expecting any decisive changes in outlook based on what happens in Jackson Hole, he said on BloombergQuint’s weekly series Thank God It’s Friday. But given that asset prices are at “bubble levels”, central banks are more likely to focus on gradual balance sheet reduction rather than raising interest rates, he added.

Here are edited excerpts from the conversation.

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