PIMCO’s Bill Gross may be the biggest bond fund manager that there is and he made a doozie of a call betting against U.S. bonds before. Now his monthly outlook is calling for bond yields to remain low, indicating little downside in price to worry about for investors.
He noted, “Recent central bank behavior, including that of the U.S. Fed, provides assurances that short and intermediate yields will not change, and therefore bond prices are not likely threatened on the downside…. Most short to intermediate Treasury yields are dangerously close to the zero-bound which imply limited potential room, if any, for price appreciation…. We can’t put $100 trillion of credit in a system-wide mattress, but we can move in that direction by delivering and refusing to extend maturities and duration.”
As you would expect, today’s commentary for his new monthly outlook has many wordsmith efforts in it and he is noting that the efforts to drive risk-asset investing may not always come about as the Fed would hope.
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