Pimco’s Crescenzi: Yields as Low as They Can Go Absent a Rate Cut

The video discusses the current state of Treasury notes, highlighting the negative carry situation where investors lose money if they borrow at higher rates than the yield. It explores market fears due to the coronavirus and the potential for yields to snap back. The impact on Europe is significant, with slow economic growth and fears of recession due to strong ties with China. The video suggests that while demand may be delayed, it is not permanently destroyed, and investors should look beyond the immediate impact.

What is the main reason investors might engage in negative carry investments?

• They want to diversify their portfolio.

• They expect borrowing costs to rise.

• They are not concerned about losing money.

• They believe the cost of money will decrease.

What is the likely outcome for yields according to the discussion?

• Yields will continue to decrease indefinitely.

• Yields will remain low due to market fears.

• Yields will have no impact on the economy.

• Yields will increase sharply in the short term.

What is the market's current sentiment regarding the coronavirus?

• Unaware of its existence.

• Concerned about its negative effects.

• Indifferent to its economic impact.

• Optimistic about immediate recovery.

How is the economic growth in Europe described?

• Unaffected by global events.

• Unpredictable and volatile.

• Slow and on the verge of stalling.

• Rapid and stable.

What is the expected nature of economic disruptions caused by the coronavirus?

• Negligible and insignificant.

• Beneficial for long-term growth.

• Temporary with a potential snapback.

• Permanent and irreversible.