Salient to Investors:

Bill Gross at Pimco said:

  • Payroll growth in November signals at least a 50 percent chance the Fed will taper in December as it clearly wants out, but must be careful given the tepid growth of 2 percent.
  • The median analyst predicts the Fed will taper to $70 billion from $85 billion at its March 18-19 meeting.
  • Pimco remains focused on buying debt with shorter maturities because they are less susceptible to higher interest rates – the 2-yr yield has been relatively stable for a long time.
  • The Fed will keep its target rate for overnight funds in a range of zero to 0.25 percent until 2016.

Mohamed El-Erian at Pimco said most on the FOMC are worried about being experimental for so long, so this strong jobs report makes the normalization process easier.

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