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Investors Abandon Government Bonds for Riskier Company Debt
26 Jul
Summary
- Investors are pulling money out of government bonds
- Investors are plowing money into US and European company debt
- Government debt may no longer be seen as the safest option
In a significant shift in market dynamics, investors are showing signs of pulling their money out of government bonds and redirecting it towards US and European company debt. This move challenges the long-held market orthodoxy that government debt is the safest investment option.
The article suggests that as US fiscal deficits continue to climb, driven by tax cuts and rising interest costs, the government may need to borrow more. This, in turn, could make company debt a more appealing investment choice for money managers. The article notes that the ongoing changes in investor behavior could signal a fundamental shift in market perceptions, with government debt no longer being seen as the unequivocal safe haven it has been for decades.
The article highlights the potential implications of this trend, as investors seek to navigate the evolving investment landscape and adapt their strategies to the changing market conditions.
