Economics
It's Dangerous Out There in the Bond Market
- Investors face damaging losses if yields rise even a little
- A half-percentage point increase would wipe out $1.6 trillion
Is There New Investor Concern About Bonds?
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Bond investors are taking bigger risks than ever before.
Yields on $7.8 trillion of government bonds have been driven below zero by worries over global growth, meaning money managers looking for income are pouring into debt with maturities of as long as 100 years. Central banks’ policy is exacerbating matters, as the unprecedented debt purchases to spur their economies have soaked up supply and left would-be buyers with few options.