Photo: Bloomberg TV
U.S. government bonds have seen their yields suppressed by Federal Reserve purchases. Veteran bond investor Dan Fuss of Loomis Sayles Bond Fund, who has previously said that he likes corporate bonds and stocks relative to treasuries, was on Bloomberg TV saying he thinks treasuries are priced way too high:
“Corporates relative to treasuries theoretically represent good value. Practically speaking treasuries are priced higher than a kite. So to say you have a big spread against treasuries doesn’t mean you’ve got a cheap bond. Most corporates are not. Some are but not real cheap.”
Fuss said as long as the Fed Reserve and offshore banks continue to purchase bonds prices will be held artificially high. And he said this would continue to happen until the currency lost credibility.