Goldman Sachs: Foreign investors are unlikely to give up U.S. Treasuries

In spite of Moody's downgrade, foreign investors are unlikely to abandon the Treasury market because there are no suitable alternatives. Lindsay Rosner, head of multi-sector investment at Goldman Sachs Asset Management, said: "Globally, there are very few countries with triple A sovereign credit ratings at the moment, close to 11 in fact, but if you look at the size of their bond markets, they pale in comparison to the size of the Treasury market." Ultimately, the US market has a depth and breadth that other markets don't have. "If long-term yields stay above 5 per cent, she added," we will eventually reach a tipping point where hedging effects, particularly spreads, will start to become attractive. "