“The real elephant in the room is we’ll have low and negative rates for a very long period of time.”

“The real elephant in the room is not the U.K. vote or a Trump presidency,” Major said. 

“The real elephant in the room is we’ll have low and negative rates for a very long period of time.”

Low rates are also a natural consequence of too much government borrowing after the financial crisis. While it gave economies a much-needed boost, the debt burden robbed many countries of their spending power, which could have supported growth over the next decade. 

This month, the Organisation for Economic Cooperation and Development warned the world economy is slipping into a self-fulfilling “low-growth trap.”
And without a pickup in growth, there’s every reason to believe that investors will continue to seek out the safety of government bonds.


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