The Federal Reserve could be done raising interest rates this summer, bond guru Bill Gross of Pacific Investment Management Co. said Tuesday.
In a Reuters report, Gross said the Fed may even reverse course and send
short-term lending rates lower again before year-end.
“Central banks don’t rest at one rate for long and if only to impart a bid to the U.S. housing market, they (the Federal Reserve) may have to start cutting again as early as the end of the year,” Reuters quoted Gross as saying at the Morningstar Inc. investment conference held in Chicago.
Gross is founder and chief investment officer at Pimco, the nation’s largest bond fund manager and a unit of German insurer Allianz AG.
The Fed funds rate is at 3%. The central bank has raised its target rate for overnight loans between banks eight times since last June in quarter-percentage point increments.
A MarketWatch report said Gross was bullish on 10-year Treasury bonds and that yields could fall as low as 3% over the next two years as corporate profits and inflation ease.
The yield on the 10-year bond is holding between 4.05% and 4.15%.
