Goldman Sachs: Foreign Investors Unlikely to Abandon U.S. Treasuries

On May 31, despite Moody's downgrade of the U.S. Treasury's credit rating, foreign investors are unlikely to abandon the U.S. Treasury market as there are currently no suitable alternatives. Lindsay Rosner, Multi-Sector Investment Director at Goldman Sachs Asset Management, stated: "Globally, there are very few countries with an AAA sovereign credit rating, actually close to 11, but if you look at the size of these countries' bond markets, you'll find they pale in comparison to the U.S. Treasury market." "Ultimately, the U.S. market has a depth and breadth that other markets do not possess." She also mentioned that if long-term Treasury yields remain above 5%, "we will eventually reach a critical point where hedging effects, especially spreads, will start to become attractive."