A Global Bond Rally With Grim Tidings

Strong demand for government debt signals slow economic growth
Photograph by Chris Ratcliffe/Bloomberg

Mohamed El-Erian knows why bond markets from the U.S. to Germany and Japan have seen yields drop to record lows even after outstanding debt has ballooned. “We may be in a synchronized slowdown,” says El-Erian, chief executive officer of Pacific Investment Management Co., the world’s largest bond manager. “We could stay here for awhile.”

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