Global interest rates are negative because the world economy is heading toward a synchronized recession.
Since 1955, or 1967, depending on whose studies you quote, a domestic recession has been preceded by an inversion of the yield curve 100% of the time. It's also true that plunging interest rates may well be forcing residential mortgage-backed securities holders to buy Treasury bonds as mortgage re-financings accelerate.
President Trump's trade war has ground global manufacturing to a halt while stunting export and import activity from Beijing to Baltimore. The crash in Argentina's markets has not been helpful to emerging markets, nor has all the mounting political, and geo-political risks that have been building in Venezuela, Iran, North Korea and between South Korea and Japan.
2.. Problem is easily solved. Have the Fed suggest that it might like to take some profits on its longer dated Treasury holdings. Curve will “normalise” within hours. Minutes even. TruthGundlach
Question for Mr. Insana and others. How often and when has the curve inverted in the absence of Fed tightening? Perhaps this inversion is the result of central banks being too easy, too long. Not saying it won’t result in recession but it is different this time. roninsana
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