Sean Egan: Fiscal Cliff Dive Wouldn’t Hurt Treasurys

Friday, 28 Dec 2012 09:20 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Even if the United States jumps off the fiscal cliff and sees its credit rating downgraded, Treasurys won’t lose their safe-haven status, says Sean Egan, founding principal of Egan-Jones Ratings.

"The assumption is that the U.S. has incredibly deep markets, and even if it's downgraded a notch or a couple notches, it's still the safest place to be of all the alternatives in the developed markets," he tells CNBC.

But Egan isn’t looking for a major rally in Treasurys. He sees crosscurrents, such as Japan seeking to push the yen down over the next six months and the European Central bank easing monetary policy.

Video:
Economist Predicts 'Unthinkable' for 2013

"I think you have a lot of things happening at once," he says. "I don't think the conclusion is that you can go into long-term Treasurys."

Indeed he thinks the 10-year Treasury yield, which was at 1.70 percent early Friday, will rise next year amid U.S. economic recovery.

Jeff Gundlach, CEO of DoubleLine Capital, also is bearish on Treasurys for next year. “I would not be surprised to see some [upward] pressure on Treasury rates,” he says, according to Barron’s.

“We have to ratchet down our expectations for fixed income next year. I’m hoping to get 6 percent returns, and that involves some active management.”

To be sure, Gundlach isn’t looking for rates to explode higher. “I think they can rise modestly,” he says.

Video: Economist Predicts 'Unthinkable' for 2013

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Marc Faber Remains Adamant: Stocks Will Drop As Much As 30%

Monday, 28 Jul 2014 21:43 PM

For months Marc Faber, publisher of the Gloom, Boom & Doom Report, has predicted that U.S. stocks would plunge, and for  . . .

WSJ's Jason Zweig: Beware of Financial Advisers Who Charge Exit Fees

Monday, 28 Jul 2014 15:19 PM

If you don't like your financial adviser, you can just take your assets and walk away, right? Not necessarily, writes Ja . . .

Journal of Commerce: Nation's Rail Network Is Getting Bogged Down

Monday, 28 Jul 2014 14:44 PM

Bottlenecks are holding up the nation's rail traffic, but higher volume from a recovering economy isn't the cause. . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved