With Germany recently joining the Central Banks selling negative-yielding bonds, there is roughly $16 trillion worth of corporate and government debt returning less to investors than they originally paid for them, if held to maturity. The search for positive yield has supported widespread purchases of U.S. Treasury securities from both international and domestic investors. The increased capital flow has kept interest rates low in the U.S., despite an optimistic economic outlook. In addition, the Federal Reserve has issued three rate cuts in 2019, twice amid trade tensions with China. Fears of an impending recession have grown stronger as these variables weigh on the country’s economic outlook.
Read More: Forbes
