BlackRock Strategist on Fixed Income

Jeffrey Rosenberg, BlackRock’s chief fixed-income strategist, and Diane Swonk, Grant Thornton chief economist, discussed the state of the U.S. Treasury market on “Bloomberg Markets.”

Key points discussed:

  • Countries other than U.S. are still in accommodation mode as far as economic policy is concerned
  • The pricing in of rate rises into current yields
  • Trade tension news are undermining economic policy confidence
  • Effect of interest rates on mortgage and housing

Rosenberg addressed a good question regarding the growth of GDP when it takes 7.5 dollars of new total debt to grow GDP by one dollar.

“Well, it’s a little bit tricky,” said Rosenberg. “Because if you lump everything into the mix on total debt growth, you miss a lot of the story.  A lot of the story is all about shifting patterns of where is the debt growth coming from so in the pre-crisis environment, the lead-up, there was a lot of consumer debt. Consumers over-indebted, they pared back their debt and government indebtedness kind of went up alongside of that.”

For the full interview, click below:

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