Andrew Rosenberger, CFA, Senior Investment Manager
On this week’s podcast (recorded February 2, 2016), Andy discusses what the world of negative interest rates looks like and how it impacts investors:
- Japan surprised markets by entering the world of negative interest rates, joining Sweden, Denmark, and the European Central Bank.
- Just a few years ago it seemed that negative interest rates were impossible; but, today there is over $5.5 TRILLION dollars of government debt with negative yields.
- Long-term impact to investors is, candidly, unknown. Short-term impact seems to lean towards lower yields globally, including the U.S.
- Large yield differentials between developed countries (Germany, Japan, U.S.) are a major reason why the U.S. dollar continues to appreciate.
- Demand created by large yield spreads is why we believe we won’t see meaningfully higher yields in the United States anytime in the near term and why we believe the Fed will back off their initially suggested pace of raising interest rates, perhaps even holding off overall.
For Andy’s full insights, click here to listen to the audio recording.
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.