Henry Blodget noted earlier this morning how PIMCO’s Bill Gross is reducing his exposure to U.S. treasuries due to inflation and deficit concerns.
Well, it turns out that BlackRock is taking the other side of the trade, and they believe that inflation fears are way overdone:
“We’re more comfortable owning longer Treasuries,” said Stuart Spodek, head of U.S. bonds at New York-based BlackRock. The world’s biggest money manager, with $3.35 trillion in assets, is becoming bullish because “there isn’t inflation in the pipeline” and the gap between short- and longer-term yields is “remarkably steep,” Spodek said in an interview last week. As recently as October, he said the “easy money has been made” in government debt.
They’re both smart, but only one will end up right. If BlackRock turns out the winner here, it’ll only further cement the company’s rise to prominence post-crisis. In some ways, BlackRock is already the new Goldman.
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