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By Bloomberg

Europe’s quantitative easing program was designed to rescue the region’s ailing economy and it will wind up ugly.

That’s the view of Carl Weinberg, who said bond yields in the euro region slipping below zero are unsustainable. The founder and chief economist of High Frequency Economics said in a note on Monday that instead they’re a “recipe for institutional failure.”

“What goes down can come right back up again,” Weinberg said. “We find recent bond market rallies alarming. We are braced for the consequences as they reverse.”

Insurance companies and pension funds with fixed annuities will struggle in the ultra-low interest-rate environment, according to HFE, a Valhalla, New York-based research firm. An inevitable bond-market selloff will catch some euro-area institutions too weak to weather the turbulence, HFE said, without forecasting a time frame or naming the institutions.

One hundred and four of the 351 securities in the Bloomberg Eurozone Sovereign Bond Index have yields below zero, data compiled by Bloomberg show. That equates to more than $2 trillion of bonds. German yields up to nine years slipped below zero on April 16. This shrinkage is “a set-up for a bond market crash and financial catastrophe,” according to Weinberg, whose colleague at HFE Jim O’Sullivan ranked second-best among forecasters of the U.S. economy last quarter.

The European Central Bank’s 1.1 trillion euro ($1.2 trillion) bond-buying plan has won credit for supporting bond prices and keeping yields near record lows. When consumer-price expectations climb, they may weigh enough on bond prices to trigger a significant selloff, he said, forecasting the annual rate of headline inflation in the euro area to rise to 1.5 percent early next year, from negative 0.1 percent in March.

HFE doesn’t see the ECB’s monetary easing able to prevent sharp reversals. Weinberg points to U.S. Treasury yields jumping on several occasions over effects such as the “debt limit scare in 2011, the fiscal cliff and the taper tantrum,” even as the Federal Reserve pumped in stimulus to aid in an economic recovery.