Bill Gross Sides With Pimco Bond Bulls in Seeing Yields Peaking - Bloomberg

Bill Gross and his former colleagues at Pacific Investment Management Co. can agree on at least one thing: bonds are attractive now. Why? Because the market is now pricing in the Federal Reserve’s key borrowing costs will peak at 4.5%. That’s too high, according to Gross, the co-founder of Pimco who was ousted from the bond powerhouse in 2014. Fed Chair Jerome Powell can’t afford to keep raising rates to slay inflation in the way his predecessor Paul Volcker did in the 1980s, because the US economy is much more leveraged now and global growth is slowing, Gross wrote in his latest outlook. That means the two-year Treasury yield, currently at 4.2%, is too high and rates across the curve have reached a “temporary” peak, he said. His view is in line with a growing number of investors, including those at Pimco, who are finding value in bonds after the global fixed-income market suffered an unprecedented 19% loss this year. Earlier this week, Andrew Balls, Pimco’s chief investment officer fo

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• Adam Huang