Michael Novogratz is convinced the bull market in fixed income is over.
“The bear market has started,” Novogratz, principal at Fortress Investment Group LLC, said in a Bloomberg Television interview with Stephanie Ruhle and Erik Schatzker. “We’ve seen probably a low yield in 30-year Treasuries.”
Novogratz made the comments at the SkyBridge Alternatives Conference in Las Vegas where he also gave a presentation touting opportunities in Chinese stocks. Yields on 30-year U.S. government debt rose to an almost five-month high Wednesday after Federal Reserve Chair Janet Yellen said long-term interest rates could jump when the central bank raises borrowing costs.
Novogratz follows investors including Alan Howard of Brevan Howard Asset Management and Bill Gross of Janus Capital Group Inc. warning last month that yields are too low, especially in European debt.
Gross said in an investment outlook this week that the bull market “supercycle” for stocks and bonds is approaching its end, as the unconventional monetary policies that have kept it alive since the financial crisis are running out.
Novogratz said in his presentation that U.S. monetary stimulus, asset prices and the debt to GDP ratio are at all-time highs, which is worrisome.
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