Salient to Investors:

Bill Gross at Pimco said:

  • Bond yields and risk spreads were too low 2 months ago and global markets that were too leveraged are now reducing risk
  • The Fed tilted over-risked investors to one side of an overloaded and over-levered boat when discussing tapering, so don’t panic.
  • The majority of global economies, including the US, are not sinking: markets just had too much risk and too much hope for a constant QE and for the growth that it would produce.
  • Investors who are selling US government debt now are missing the influence of inflation on the Fed’s decisions – the market basically misinterpreted the growth and unemployment targets while leaving out inflation targets going forward.
  • We may have reached an inflection point of low Treasury, mortgage and corporate yields in late April, but this is overdone.

Bond-fund managers from Gross to Jeffrey Gundlach at DoubleLine Capital say it is a bad time to sell bonds because the economy is not strong enough to sustain higher borrowing costs.

US-listed bond mutual funds and ETFs saw record monthly redemptions through June 24.

Read the full article at

Click here to receive free and immediate email alerts of the latest forecasts.