Rogoff Fears Junk Bond Bubble Will Soon Pop

High-yield, or junk, bonds soared last year, and many experts anticipate the rally will continue this year.

But Harvard economist Ken Rogoff isn’t so sure.

Sustained low interest rates may well spark a bubble in the junk bond market, the former IMF chief economist told Bloomberg.

“I care when there’s massive borrowing, especially short-term borrowing, that’s fueling asset-price rising. That I think is a big cause for concern.”

Junk bonds returned 57.5 percent last year, and many junk bond fund managers see more gains ahead. (more)