Negative interest rates are coming to the US, a CIO overseeing $270 billion says - Business Insider

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Negative interest rates are coming to the US, a CIO overseeing $270 billion says

means companies that would normally be shut out of credit markets in times of market stress are instead able to access the debt markets and raise money, helping them potentially avoid bankruptcy.

In March, $262 billion in investment-grade debt was issued, breaking the previous May 2016 record of $168 billion. And in April, the March record was surpassed by a record $285 billion in new such debt issues. By merely announcing its intentions, not acting on them, the Fed shored up the credit market, Minerd said.

"Amazingly, the Fed ended up buying only a small amount of Treasury debt during that period. The reason, of course, is that the market perceived that the Fed had given Treasury investors a put. Any time rates began to approach 2.5 percent, investors would step in and start buying because there was very little downside. A similar dynamic is at work right now in the credit markets.

 

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