In his latest monthly note, PIMCO’s Bill Gross said he didn’t know who would be buying Treasuries after QEII ended this summer. He said, specifically, that he wanted out of the market.
Well, he has. ZeroHedge has a look at Bill Gross’ latest holding, which confirm the exodus from Treasuries, and a massive build up in good old greenbacks.
The fat blue line is Treasuries.
This is a pretty huge bet, and although it makes sense that Treasury values fall after the Fed steps away from the bid, there is a strong counterpoint. After all, Treasuries have SOLD off during QE, after a period of rallying without QE.
If you figure that QE pumps up risk assets, it stands to reason that the end of QE means selling in risk assets and more buying of risk-free, low-yielding Treasuries.