Tags: pimco | mather | new normal | economy

Pimco's Mather Sees Clear Departure From 'New Normal'

Friday, 25 Apr 2014 05:51 PM

The era of sluggish growth characterized by Pacific Investment Management Co. as the “new normal” is ending, according to one of the firm’s deputy chief investment officers.

“Our view is that what you’ll see in next the few years is we’re going to head back to a new destination,” Scott Mather, one of Pimco’s six deputy chief investment officers, said in a Bloomberg Radio interview with Tom Keene.

The firm’s forecast for U.S. growth has increased to the high 2 percent level, “which is better than sub-2 percent level of growth that we’ve experienced for several years,” Mather said.

Pimco, manager of the world’s largest bond fund, outlined the “new normal” scenario at its annual forum in May 2009 after the worst financial crisis since the Great Depression plunged the U.S. into recession. The Newport Beach, California-based firm’s co-founder and chief investment officer Bill Gross and the firm’s former Chief Executive Officer Mohamed El-Erian popularized the term and predicted the economy would expand at a below-average pace for the next several years as growth in developed countries slows and amid the “heavy hand of government.”

“We’ve already left the most intense period of deleveraging that really created all sorts of pressures and adjustments that needed to happen in the economy,” Mather said.

Economists project U.S. gross domestic product expansion of 2.7 percent in 2014, according to the average estimate of 78 responses in a Bloomberg survey. The U.S. grew 1.9 percent last year after expanding 2.8 percent in 2012.


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The era of sluggish growth characterized by Pacific Investment Management Co. as the "new normal" is ending, according to one of the firm's deputy chief investment officers.
pimco, mather, new normal, economy
249
2014-51-25
Friday, 25 Apr 2014 05:51 PM
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