Tags: Pimco | Gross | Fed | Inflation

Pimco's Gross: Fed 'Is Playing a Game' With Inflation

Wednesday, 14 Mar 2012 07:18 AM


Pimco founder and co-chief investment officer Bill Gross, who heads the world's largest bond fund, took issue with the Federal Reserve's decision on Tuesday to keep U.S. interest rates low until 2014.

During a CNBC interview, Gross said that the Fed's decision will continue to "subordinate" bond investors.

Gross said "April holds the key" as the time when the board could enact another round of stimulus or quantitative easing.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

In past quantitative easing moves, the Fed has either bought Treasurys or mortgage-backed securities.

Gross also disagreed with the Fed's pronouncement that inflationary expectations have remained stable, saying the Fed "is playing a game" by saying otherwise.

Pimco's Total Return Fund, with $250 billion under management, upped its exposure to mortgage-backed securities in February to 52 percent of the fund's portfolio. It had been 50 percent at the end of January.

Gross has been steadily plowing into mortgage-backed securities on the expectation that the Fed would announce a new round of mortgage bond buying.

But with the Fed's latest decision, it appears a new round of mortgage bond buying by the Fed is on hold, or least delayed for the time being.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

© 2015 Thomson/Reuters. All rights reserved.

Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.

You May Also Like
Around the Web
Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved