It’s Just Math: Negative Rates Crush Investors’ Returns… and Business Models

WSJ: Era of Low Interest Rates Hammers Millions of Pensions Around World

It took long enough but the main stream media has finally caught on. Negative interest rates policy across the globe has created devastating effects on investors and savers.  Retail and institutional expectations for investment returns since the mid-nineties  have ranged from 6-10%.

Treasuries in non-U.S. economies are at zero and below with the U.S. 10-year benchmark bouncing around in the 1.5-2% range.  Pension funds will not meet their actuarial assumptions.  As a package, negative rates will create potentially disastrous dislocations in the financial markets-equity, bond and currency alike.  The world’s largest and most knowledgeable bond players such as Larry Fink and Bill Gross have been sounding the alarm for some time to no avail  But now it sounds like folks are starting to get the message.  Check out this article from the Wall St. Journal…

Leave a Comment

Your email address will not be published. Required fields are marked *