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September 13, 2011

CNN Money: Ken Naehu Quoted in “Yields keep falling. How low can they go?”

“Yields keep falling. How low can they go?,” by Hibah Yousuf, CNN Money.

“Europe is a scary place right now, and until we see a solid plan that will change investor perception, we have to get used to the 10-year yield hanging below 2%,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

But the trend of falling Treasury yields won’t last forever, despite the moves over the last three decades, said Bel Air Investment Advisors’ Naehu.

“Eventually, the government and Fed will set out on a quest to increase inflation, and once they’re successful, we’ll see rates move substantially higher,” he said.

That’s been Pimco (PTTRX) CEO Bill Gross’ argument since the start of the year, and Naehu said that eventually, his bet will be right. Knowing when to make it, however, is the hard part.

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