Brian Chappatta, Columnist

Cash Is Hardly a Haven From Negative Yields

Don’t be fooled: Those relatively high money-market rates can disappear in a flash.

August 7, 2019 at 9:00 AM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Cash may be king now, but its reign is nearly over.
Photographer: Seong Joon Cho/Bloomberg

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Cash is just a flash in the pan.

The inherent appeal of U.S. money-market funds is undeniable. For one, they’re a stable alternative when America’s trade war with China is whipsawing equity markets. Plus, they still pay more than 2% interest in a world in which $14.5 trillion of debt yields less than zero, including 30-year German securities and even some junk-rated corporate bonds. Last week, Barron’s published an article titled “The Case for Going into Cash Now,” which made both of those points.