June 24, 2009 / 10:24 AM / 10 years ago

State Street's Lowe sees US yields at 4.5 pct in 6-12 months

HONG KONG, June 24 (Reuters) - A flood of more U.S. government bond issuance after a record amount this week will likely push up yields to 4.5 percent in as soon as six months, said the chief investment officer of global asset allocation for State Street Global Advisors on Wednesday.

“I think we’ll see 4 and a half in the next 6 to 12 months in U.S. government bonds, because I think we will dig our way out of this complete panic and normalise and see positive economic growth at the end of this year,” Alistair Lowe told Reuters, adding the firm had been underweight government bonds since November 2008.

Lowe, who also oversees currency portfolios, said he expected the U.S. dollar to continue weakening as investors moved money out of ultra safe bets into other currencies that would benefit from higher commodity prices, such as the Australian dollar and the Canadian dollar.

State Street Global Advisors is the investment arm of State Street Corp (STT.N). It had $1.4 trillion in assets under management as of March 2009. (Reporting by Kevin Plumberg; Editing by Saeed Azhar)

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