From WSJ, the latest rate call from bond god Jeff Gundlach, who says there’s no imminent prospect of US interest rates heading higher.
“It’s not timely to be betting on higher interest rates,” said Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine, a Los Angeles firm with $59 billion under management. He said economic growth remains too soft to allow the Fed to consider cutting back its $85 billion-a-month bond-purchase program known as “quantitative easing,” a shift he views as a necessary precursor to any increase in interest rates.
Meanwhile, Bill Gross is on the same side, although this is a tune reversal from earlier this year:
This year has played out much the same way. In January, Pimco’s Mr. Gross told investors to avoid U.S. government bonds maturing in at least 10 years, because low yields on the debt raise the risk that holders will have their purchasing power eroded by inflation. BlackRock warned investors that long-term government bonds had limited upside. Prices fell and yields rose above 2% in March from 1.78% at year-end. But weak manufacturing data, slowing jobs gains and a fall in gasoline prices, undermining the bears’ inflation argument, have again limited the impulse to flee government bonds.