Video - September 2025How Lower Rates Could Help Infrastructure Companies
Transcript
Christian Kansler:
As the Federal Reserve signals continued monetary easing, investors are asking: how will falling interest rates impact infrastructure investments? Portfolio Manager Eric Bright of the Cromwell Foresight Global Infrastructure Fund shares insights on the benefits these companies could see.
Eric Bright:
I think what is apparent is that we will continue to see cuts coming through. The pace of those is likely to pick up. That is likely to be a positive for infrastructure stocks.
There's two ways in which that some positive. The first is that we may see a lower cost of capital for these companies. And so when they're investing into new projects that is more profitable. That may take a little while to come through, but it's definitely a positive for them. And I guess the bigger overall impact is one of investor sentiment.
So if we see rates coming down, investors in stock markets understand that infrastructure companies are long duration by nature and hence there should be a positive correlation there.
And so the headwinds that we've seen over the last 2 or 3 years, we expect this, these accelerating rate cuts to turn into more of a tailwind.
Christian Kansler:
As the Federal Reserve signals continued monetary easing, investors are asking: how will falling interest rates impact infrastructure investments? Portfolio Manager Eric Bright of the Cromwell Foresight Global Infrastructure Fund shares insights on the benefits these companies could see.
Eric Bright:
I think what is apparent is that we will continue to see cuts coming through. The pace of those is likely to pick up. That is likely to be a positive for infrastructure stocks.
There's two ways in which that some positive. The first is that we may see a lower cost of capital for these companies. And so when they're investing into new projects that is more profitable. That may take a little while to come through, but it's definitely a positive for them. And I guess the bigger overall impact is one of investor sentiment.
So if we see rates coming down, investors in stock markets understand that infrastructure companies are long duration by nature and hence there should be a positive correlation there.
And so the headwinds that we've seen over the last 2 or 3 years, we expect this, these accelerating rate cuts to turn into more of a tailwind.
