Tags: Janus | Bill Gross | Economic Cycle | Artificial Rates

Janus' Bill Gross: Economic Cycle Driven by 'Artificial Rates'

Thursday, 02 Jul 2015 11:37 AM

Bill Gross, manager of the $1.5 billion Janus Global Unconstrained Bond Fund, said the U.S. economic cycle is weak and driven primarily by “monetary stimulation” and “artificial interest rates.”

Gross, in an interview with Bloomberg Radio, said the current economic environment has the potential to create asset bubbles that may ultimately pop, and the Federal Reserve will have to weigh that, along with employment and inflation data, when it decides whether to raise rates.

Although Fed Chair Janet Yellen and Vice Chair Stanley Fischer are “neo-classically demand-driven economists, the ground underneath them is shifting to more monetary, liquidity, financial conditions focus,” Gross said. He added that rates could rise in September.

In the U.S., job creation advanced while wages stagnated and the size of the labor force receded. The addition of 223,000 jobs in June followed a 254,000 increase in the prior month that was less than previously estimated, a Labor Department report showed Thursday. The jobless rate fell to a seven-year low of 5.3 percent as more people left the workforce.

Hold Cash

Gross expressed concern earlier this week that a panic could test the market’s liquidity in an investment outlook posted on June 30, advising investors to hold cash in order to stem losses during a possible market decline.

“Long used to the inevitability of capital gains, investors and markets have not been tested during a stretch of time when prices go down,” Gross wrote in the outlook. “It’s then that liquidity will be tested.”

In today’s interview, Gross said that he faulted both sides of the current Greek crisis, adding that he was against the fiscal austerity position of the Mediterranean island’s creditors because of the likelihood it would only increase unemployment.

“I wouldn’t blame the Greeks if they jumped into the deep blue sea,” he said.


© Copyright 2017 Bloomberg News. All rights reserved.

   
1Like our page
2Share
StreetTalk
Bill Gross, manager of the $1.5 billion Janus Global Unconstrained Bond Fund, said the U.S. economic cycle is weak and driven primarily by "monetary stimulation" and "artificial interest rates."
Janus, Bill Gross, Economic Cycle, Artificial Rates
300
2015-37-02
Thursday, 02 Jul 2015 11:37 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved