News | 08.12.19

Investors Ponder Negative Bond Yields in the US

by: Sam Goldfarb; Daniel Kruger

A steep slide in US government-bond yields last week left some investors pondering whether interest rates in America could one day turn negative. There is currently more than $15 trillion in government debt around the world with negative yields. So far, the United States has avoided that fate, but tumbling yields have sparked new discussion about larger forces that have dragged yields below zero elsewhere and to which the United States may not be immune. Those include lackluster economic growth since the financial crisis and persistent soft inflation that has puzzled many economists. Some investors now believe US yields could fall more quickly than previously expected. In recent weeks, there have been signs that central banks around the world are racing to cut interest rates in an effort to stay ahead of the Fed and support their economies by weakening their currencies. Related Story: Financial Times

Read the full article on Wall Street Journal