I'm concerned about negative interest rates: Cohn

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Goldman Sachs President Gary Cohn said Wednesday he is "very concerned about negative interest rates throughout a lot of Europe."

"It's very hard in the insurance business, in the asset management business, in the pension business, when you can't get a return on your capital," he said in an interview withCNBC's "Squawk Alley" during a break at the Goldman Sachs TMT Leveraged Finance Conference.

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Cohn was responding to a comment by DoubleLine Capital co-founder Jeffrey Gundlach. In an investor webcast on Tuesday, Gundlach said that roughly $2 trillion of bonds around the world have negative yields.

Cohn explained that negative yields could be "sustainable" and that we "will continue to have more negative interest rates as we've just started down the path of quantitative easing in Europe."

He added that QE is making Europe cheaper in an effort to attract more foreign investment and tourism to generate jobs.

"I think a lot of us are going to plan vacations in Europe this summer and that's exactly what I think Mario Draghi had intended as he started down the QE plan."

The Fed

Gary Cohn, Goldman Sachs
Jason Alden | Bloomberg | Getty Images

Ahead of next week's Federal Reserve meeting, Cohn said that the U.S. central bank is in "a really difficult spot."

"I completely understand Janet Yellen and her view that zero interest rates were emergency measures," he said. "But then she has to deal with the real realities of the world."

The realities, according to Cohn, are a soaring U.S. dollar that can hurt American exporters and a job participation rate that went down in February.

"If there were Fed President Cohn, he probably would vote to keep patient," he joked.


Cohn said that corporates are in a good position where they feel confident because consumers are spending and cash is available.

"You are not going to see the huge growth in mergers, but you are going to continue to see these billion-dollar, highly synergistic mergers of companies that make sense to be put together."