Tags: bill gross | janet yellen | economy | walk

Bill Gross: Yellen's Economy 'May Never Walk Normally Again'

Image: Bill Gross: Yellen's Economy 'May Never Walk Normally Again'

Bill Gross (Getty Images/Mark Wilson)

Friday, 26 Aug 2016 02:13 PM

 

Bill Gross, the billionaire Janus Capital Group Inc. money manager, criticized Fed Chair Janet Yellen’s suggestion that she could consider further asset purchases as the equivalent of “providing a walker or a wheelchair for an ailing economy.”

Yellen, speaking Friday at a conference of central bankers and economists in Jackson Hole, Wyoming, said while the U.S. economy has strengthened to the point that interest rate hikes are possible, further asset purchases must remain part of the Fed’s toolkit. Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, has long criticized central bankers in the U.S., Europe and Japan for keeping interest rates ultra-low and artificially inflating asset prices without adding sustainable economic growth.

“She is opening the door to creating even greater asset bubbles as have the BOJ and ECB and SNB by purchasing corporate bonds and stocks,” Gross wrote Friday in an e-mail response to questions. “This is not capitalism. This is providing a walker or a wheelchair for an ailing economy. It may never walk normally again if monetary policy continues in this direction.”

Gross said Yellen’s comments didn’t take a September rate hike off the table, especially if job growth is healthy. The Labor Department reports August employment data on Sept. 2. The probability of a hike at the Sept. 21 Fed meeting has risen to 38 percent from 15 percent two weeks ago, according to data compiled by Bloomberg.

“To the extent that next month we see a decent job growth number, then I think for sure or close to for sure, you know, in September we’re going to see a Fed hike of 25 basis points,” Gross said in an interview on CNBC. “The market hadn’t expected that.”

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Bill Gross, the billionaire Janus Capital Group Inc. money manager, criticized Fed Chair Janet Yellen's suggestion that she could consider further asset purchases as the equivalent of "providing a walker or a wheelchair for an ailing economy."
bill gross, janet yellen, economy, walk
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2016-13-26
Friday, 26 Aug 2016 02:13 PM
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