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Walsh: Eurozone Not Doomed but Has Rough Sledding Ahead

ECB policies have stemmed volatility in the eurozone, but unless the region can start growing economically, global investors will still head toward low-risk U.S.-dollar-based assets, says Western Asset's Steve Walsh.

Jeremy Glaser: Let's take a look at some of those risks that you mentioned, particularly from abroad. You mentioned the eurozone as being a potential risk. Is the eurozone completely doomed? Do they have a way out of this mess, and what impact could that have on U.S.-based bond investors?

Steve Walsh: The eurozone issue which has been with us since, I guess, it was the spring of 2010 when Greece first started to have their problems, and the markets became aware of sort of fiscal problems that existed across the periphery and what that might mean for the whole eurozone. So it's been with us for a good three or more years, and it's likely, Jeremy, to be with us for a while. We've been in the sort of muddle-along camp that this is going to be an issue that markets are going to have to continue to focus on. It's a tough thing to do for the eurozone policymakers to cobble together everything necessary to guarantee to investors that the eurozone is watertight and going to exist forever.