While other countries are experiencing negative interest rates, the US bonds remain positive; but, only relatively. Global bond yields are at an historic low. For some countries they have already gone negative. US bonds are positive, but at a very low rate. The trend of many countries is negative over the last few decades. There are worries about a US recession within the year. The Brexit is also a worry, though one that will resolve itself soon. One of the things propping up US bonds is the poorer situations around the world. This is all happening as quantitative easing is unhinging some markets from their base values. With very low interest rates, central banks have little maneuvering room to adjust the rate to create economic change. Interest rates are also a major tool against inflation; but now there are worries about deflation and inflation simultaneously. The bond markets are confused, reducing confidence in yet one more investment class. The big money is running out of places to go.

(Click on the graph for the link.)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s