Goldman Sachs’s Cohn Says Public May Not Understand Bond Risks

Feb. 11 (Bloomberg) -- Goldman Sachs Group Inc. President Gary D. Cohn said that interest rates at or near record lows will eventually rise and he’s concerned some investors don’t understand that bonds will lose value.

“There is really only one way that interest rates can go,” Cohn, 52, told Stephanie Ruhle on Bloomberg Television’s “Market Makers.” “I’m concerned the general public doesn’t understand” that a rise in interest rates will reduce the value of their fixed-income holdings.

Cohn, a former head of fixed-income trading at New York- based Goldman Sachs, said that the U.S. has undergone a “32- year bull market in bonds” and that many other countries have reduced interest rates significantly.

“Obviously this needs to come to an end at some point,” he said, adding that he’s not predicting when that will happen.

Cohn was speaking from Cleveland, one of the cities where the firm provides education and funding for small-business owners. He said the Goldman Sachs’s “10,000 small businesses” program has about 1,300 graduates and 50 percent have hired more workers.

Small businesses have a harder time getting new capital than large firm, Cohn said, while interest rates have a greater effect on big companies.

Goldman Sachs, the fifth-biggest U.S. bank by assets, focuses primarily on advising, financing and investing with large companies and institutional investors.

--Editors: Steven Crabill, Rick Green