World's largest bond investor sees little recession warning in yield curve
The head of the world’s largest bond fund says investors shouldn’t read too much into the recessionary signal coming from the U.S. Treasury market.
Besides growth concerns, the investment manager instead sees other factors that have contributed to the phenomenon of long-term yields falling below their short-term counterparts.
“Given where our unemployment rate is currently, [a recession], holding all else equal, shouldn’t be much of a concern,” he said. The decline in yields, reflecting higher debt prices, can indicate bond investors anticipate lackluster growth, in turn, and subdued concerns about inflationary pressures that would erode fixed-income gains.Read: This time, an inverted yield curve suggests the stock market has already peaked, some analysts say
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