Finance

Kyle Bass, chief investment officer of Hayman Capital Management LP

Patrick T. Fallon | Bloomberg | Getty Images

U.S. interest rates will keep falling and follow global interest rates all the way down to zero, hedge fund manager Kyle Bass said.

“We’re the only country that has an integer in front of our bond yields. We have 90% of the world’s investment-grade debt. We actually have rule of law and we have a decent economy. All the money is going to come here,” Bass, founder and chief investment officer at Hayman Capital Management, told CNBC’s David Faber on Tuesday.

Bass’ comments come as several central banks around the world have implemented stimulative policies to the point where around $15 trillion of global debt trades with a negative rate. Germany and France’s respective 10-year yields are in negative territory along with Japan’s benchmark rate. China has also implemented stimulative measures to mitigate slowing economic growth.

“This is insane. The Japanese are going to keep going. The Chinese print money like it’s a national pastime today. Europe is going to restart QE,” Bass said.

In the U.S., the Federal Reserve cut interest rates by 25 basis points last month, citing “global developments” and “muted inflation.” Market expectations for lower rates in September are also at 100%, according to the CME Group’s FedWatch tool.

Bass noted U.S. rates will fall to zero as politicians disregard budget deficits while economic activity in Europe and China slows. However, these measures could have dire consequences.

“The unintended consequences of central bank printing are that it makes the rich even richer, it makes the middle class stay where they are and it makes the poor stay poor,” Bass said.

This is breaking news. Please check back for updates.

Subscribe to CNBC on YouTube.

Products You May Like

Articles You May Like

Viacom CEO says new streaming services are boosting demand
‘Game of Thrones’ prequel series about the Targaryen family in development at HBO, reports say
Oil output will be fully back online by end of September, Aramco IPO on track, Saudis say
‘The most important chart in the world’ offers a warning sign for stocks
Downton Abbey is listing on Airbnb for $187 — for one night only

Leave a Reply

Your email address will not be published. Required fields are marked *