Pimco co-founder, who was once a bond king, has equated them to an “investment garbage” that is similar to cash. US 10-year Treasury yield is 1.296%.
- Gross says long-term yields on Treasuries are low, equating funds that buy them to an “investment garbage can.”
- The investor says ten-year yields would likely rise to 2% in the next 12 months, from the current 1.3%, which will cause a loss of about 3% to investors.
- Gross also feels that stocks can easily fall into the “trash” category if earnings fail estimates.
- The Pimco co-founder says supply and demand dynamics are weighing against the Treasuries, saying that current yields have to go higher.
- Gross has held bearish positions on bonds. In March, he said he was betting against Treasuries at the 1.25% rate.
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