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Home / Business / Kyle Bass says US interest rates will follow the rest of the world to zero – & # 39; This is insane & # 39;

Kyle Bass says US interest rates will follow the rest of the world to zero – & # 39; This is insane & # 39;



Kyle Bass, Chief Investment Officer of Hayman Capital Management LP

Patrick T. Fallon | Bloomberg | Getty Images

The central banks are just starting to make money, said hedge fund manager Kyle Bass, predicting that US interest rates will continue to fall and follow global interest rates down to zero.

"We are the only country that has a whole number ahead of our bond yields. We have 90% of the world's debt to investment grade. We actually have the rule of law and have a decent economy. All the money will come here," said Bass, founder and chief investment officer of Hayman Capital Management, to CNBC's David Faber on Tuesday.

Bass' comments come as several central banks around the world have implemented stimulus policy to a point where around $ 1

5 trillion of global debt is trading at a negative interest rate. Germany and France's respective 10-year returns are in negative territory along with Japan's reference rate. China has also taken stimulating measures to curb slow economic growth.

"This is insane. The Japanese are going to continue. The Chinese are printing money as if it is a national pastime today. Europe is going to start QE again," Bass said.

In the United States, the Federal Reserve cut interest rates by 25 basis points last month, citing "global development" and "dampening inflation." Market expectations of lower interest rates in September are also at 100%, according to CME Group's FedWatch tool.

Bass noted that US prices will fall to zero when politicians ignore budget deficits while economic activity in Europe and China slows down. However, these measures can have serious 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 poor," Bass said.

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