Pool of Negative-Yield Debt Shrinks Rapidly as Bond Market Turns
- Sub-zero pool now $6.5 trillion, down from over $12 trillion
- Bonds have slumped since central bankers’ hawkish turn in June
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Central bankers’ signals of a coming end to the era of unprecedented stimulus are helping shrink the pile of debt with negative yields, which is now the smallest since just after the Bank of Japan went sub-zero.
The selloff in global bonds that started in June means there is $6.5 trillion of securities in the Bloomberg Barclays Global benchmark index that guarantee losses if held to maturity. That’s down from a peak of more than $12 trillion just after the U.K.’s Brexit referendum in June last year. It now represents a mere 14 percent of the overall index, the lowest in 18 months.