Columbia Threadneedle's Cielinski: Bottomed out rates will hit bond and equity relationship

He said although low interest rates conventionally benefit risk assets, equities will struggle to find value now interest rates cannot fall much further. This is because low and static rates imply higher present values and therefore greater liabilities for pension funds and shortfalls for insurance companies, while also diminishing the effect of compound returns for savers. Cielinski (pictured) said: "Conventionally, all assets can be valued using a discount rate comprising a risk-free asset and risk premia. When interest rates fall, the discount rate also falls, which leads the value...