ANZ Boss Warns Global Markets Are in a ‘Dangerous Situation’ as Interest Rates Rise

ANZ CEO warns of dangerous global market situation as interest rates rise, Digi Mart USA News (Australia): ANZ chief executive Nuno Matos says equity markets are at record highs and interest rates are rising, which he describes as a “dangerous situation” for global markets.

Matos said the competition for capital is intense worldwide, driven by the build-out of artificial intelligence and data centres, which is feeding an expenditure super-cycle. He said this, together with high government spending, stubborn inflation and rising interest rates, poses a serious problem.

“Globally, undoubtedly, the combination of those four factors, and Australia is not different in that regard,” he said. “They are contributing to a competition for capital.

We never saw this amount of spending in our lives, in our lifetimes.”

Giving evidence at a parliamentary inquiry in Canberra, Matos said he did not think Australia was heading for recession. He said he expected the economy to slow noticeably in the near future but did not think it would contract.

Reserve Bank governor Michele Bullock had said last week that the RBA was not forecasting a recession.

Matos said Australia could still be hit by a negative global shock linked to the AI build-out and intense competition for capital. “If we have an AI, let’s call it an AI blip, in the world, we will have globally a big problem,” he said, adding that he did not expect this but that it was not impossible.

On inflation, Matos said any reduction in spending, public or private, would ease pressure on prices. He said governments should reflect on how they compete for capital and that a rebalancing toward private investment leading spending would be sustainable over the long term.

Matos also warned about adopting AI widely without adequate guardrails and global regulation, citing risks of fraud, scams and attacks on critical bank and public infrastructure. He said he could not predict whether AI would have a net positive or negative effect on jobs.

Matos also reported that ANZ posted a full-year cash profit of $7.59 billion, up 31 per cent on a reported basis and 10 per cent on a real basis. He defended the big banks, saying mortgage lending was one of the least profitable areas of banking in Australia.