Negative-Yield ‘Quicksand’ Risks Trapping Even the U.S. Bond Market
- ‘Plain-vanilla recession’ could be trigger: JPMorgan’s Loeys
- But Wilmington Trust says growth, inflation to buoy yields
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The world’s almost $13 trillion pile of negative-yielding bonds is looking like “quicksand” that risks engulfing much of the fixed-income universe, including the U.S., says JPMorgan Chase & Co.’s Jan Loeys.
The prospect of Treasury yields dropping to zero may seem remote, with the 10-year benchmark now back above 2%, the U.S. jobless rate near a 50-year low and stocks close to record highs. But Loeys, a senior adviser of long-term investment strategy, lays out a scenario in which that could happen.