, Columnist
Is Pimco Right That Negative Yields Make Sense?
The $1.84 trillion money manager sees longer lifespans changing consumption behavior.
The U.S. could join Europe in the negative-yield club.
Photographer: Dominique Faget/AFP/Getty Images
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It’s longer retirements, stupid.
That, in a nutshell, is why negative bond yields might not be a nonsensical bubble ready to burst but actually natural, according to Joachim Fels, Pacific Investment Management Co.’s global economic adviser. More people in developed economies are living longer and need to save for decades of retirement, which, according to Fels, is causing a radical shift in how people prioritize immediate spending compared with future consumption.
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Is Pimco Right That Negative Yields Make Sense?