Bonds Signaling a Fed on Permanent Hold, Fleming Says

  • Former Morgan Stanley executive speaks on ‘Wall Street Week’
  • Fed ‘missed the window’ to raise rates, he says in interview

Global bond markets in negative or record-low-yield territory signal slow growth that means the U.S. Federal Reserve probably missed its window to raise interest rates, according to former Morgan Stanley wealth-management head Greg Fleming.

“Given the uncertainty and a lot of the challenges that these central banks are dealing with, rates are not going up really anywhere,” Fleming said in an interview with “Wall Street Week” scheduled to air Friday. “Our Fed has missed the window to take rates up. And I do think that’s going to be a problem over time.”

Yields on 10- and 30-year U.S. Treasuries touched record lows this month after Britain’s vote to leave the European Union sparked concerns about global economic growth. With the Fed’s key interest rate at just above zero, the central bank has fewer tools if the economy sputters in the next three years, Fleming said. The U.S. economy is in the later stages of an expansion that could be hindered by a strong dollar, he said.

Market volatility will remain elevated after the so-called Brexit vote injected uncertainty about the future of the euro, Fleming said.

“Wall Street Week” is produced by SkyBridge Media, an affiliate of SkyBridge Capital, the fund-of-funds business founded by Anthony Scaramucci.

(Corrects to remove comments about Hillary Clinton erroneously attributed to Fleming in a transcript of “Wall Street Week”.)
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