Negative-Yielding Debt Hits Record $16 Trillion on Curve Fright
Negative-Yielding Debt Hits Record $16 Trillion on Curve Fright
(Bloomberg) -- The recession alarm bell ringing in U.S. government bond markets sent investors rushing once more to haven assets, pushing the world’s stockpile of negative-yielding bonds to another record.
The market value of the Bloomberg Barclays Global Negative Yielding Debt Index closed at $16 trillion Wednesday after the key U.S. 2-year and 10-year yield curve inverted for the first time 2007 -- a move often considered a harbinger of an economic downturn.
Global bonds surged on the bearish signal as investors sought the safety of government debt. The benchmark 10-year Treasury yield dropped below 1.6% and the 30-year equivalent fell to its lowest on record.
The escalating U.S.-China trade war, political tensions in Italy, Hong Kong and Argentina and disappointing economic data from China to Germany have fueled demand for haven securities this month. Strategists are increasingly speculating Treasury yields could join the below-zero club, something former Federal Reserve Chairman Alan Greenspan said wouldn’t be that big of a deal.
To contact the reporter on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Joanna Ossinger, Adam Haigh
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