Billionaire bond investor Bill Gross says investors should plan for asset purchases by global central bankers to continue to dominate financial markets and keep interest rates artificially low.
"But while a methadone habit is far better than a heroin fix, it has created and will continue to create an unhealthy capitalistic equilibrium that one day must be reckoned with.”
Yields on 10-year U.S. Treasuries are likely to rise gradually but stay artificially low “due to the kindness of foreign central bank quantitative easing policies” according to Gross, who runs the Janus Global Unconstrained Bond Fund. The fund returned 5.3 percent in 2016, beating 55 percent of its Bloomberg peers.
“I would venture a guess that without QE from the ECB and BOJ that 10-year U.S. Treasuries would rather quickly rise to 3.5 percent and the U.S. economy would sink into recession”.
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