Bill Gross made his fortune managing bonds. But the so-called bond king says his asset class is, bluntly, trash.
Gross, the co-founder of Pacific Investment Management Co., wrote in an investment outlook posted on his website that the yield on the 10-year Treasury TMUBMUSD10Y, 1.325% has nowhere to go but up.
Gross says the tapering of the Fed’s $120 billion per month asset purchase program will probably end by the middle of the next year, as inflation remains greater than 2% and the economy continues to recover. “Granted, that still leaves $600 or $700 billion of Treasury and mortgage debt yet to buy, but foreign central banks and investors have been selling in the past few years and $1.5 trillion fiscal deficits are perhaps a minimum of what we can expect in the U.S.,” he said.
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