Capital Markets: Observations and Insights Autumn 2019

Paying to Lend ​ Lending vs. Owning

LENDING vs. OWNING

• Weakening global economic activity, due in part to the trade war along with secularly low inflation, has weighed on interest rates

Falling Global Rates

Worldwide Negative Yielding Debt

Germany

U.S.

Japan U.K.

$16

3%

$12

2%

$8

1%

Trillions

$4

0%

$0

-1%

Jun-14

Jun-17

Jul-17

Jul-18

Jul-19

Mar-15

Mar-18

Dec-15

Dec-18

Sep-16

Sep-19

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Jan-17

Jan-18

Jan-19

Source: FactSet and Bloomberg as of September 2019. Global rates are 10-year government bond yields.

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