(Bloomberg) — Joseph Stiglitz, the Nobel-prize-winning economist, said the Federal Reserve should hold interest rates unchanged through 2015 to support the U.S. economy. A slower pace of rate increases seems to be a view shared by analysts, who are cutting their forecasts for Treasury yields.
“America’s recovery is anemic,” Stiglitz said in a Bloomberg interview Thursday at the World Bank and International Monetary Fund meeting in Lima. On the question of whether the Fed will move this year, he said, “I hope not.”
Treasuries have been the main beneficiaries as signs of slowing growth and ebbing inflation led investors to push back estimates of when the Fed will raise rates. Analysts surveyed by Bloomberg don’t see 10-year note yields rising above 3 percent until the first quarter of 2017, compared with a forecast in April that saw the yield climbing to 3.22 percent by the end of 2016.
Treasury 10-year note yields rose two basis points, or 0.02 percentage point, to 2.12 percent as of 9:03 a.m. New York time, according to Bloomberg Bond Trader data. The price of the benchmark 2 percent security due in August 2025 was 98 29/32.
Treasuries are beating an index of global stocks for a second year on demand for safety. The U.S. government securities returned 1.6 percent this year through Thursday, while investors in the MSCI All CountryWorld Index of shares have lost 1.1 percent including reinvested interest, according to data compiled by Bloomberg. In 2014, U.S. government bonds earned 6.2 percent, while the stock index gained 4.8 percent.