Bill Gross Releases Investment Outlook, " 3.5% ASAP"

News provided by

Jul 11, 2022, 13:00 ET

LAGUNA BEACH, Calif., July 11, 2022 /PRNewswire/ -- Legendary bond and fixed income investor William H. (Bill) Gross today released a new Investment Outlook, "3.5% ASAP". In his latest Investment Outlook, Mr. Gross revisits one of his most prescient Investment Outlooks, "Credit Supernova!" – the phenomenon of ever expanding credit as "a monster that requires perpetually increasing amounts of fuel, a supernova star that expands and expands, yet, in the process begins to consume itself."

At the time of that Investment Outlook in February 2013, outstanding credit in the U.S. was $56 trillion "and counting", and since then "has expanded from $75 trillion to $90.5 trillion in a misguided effort to stabilize asset prices, inflation, and economic growth," according to Mr. Gross. Much of it going "into speculative financial assets as opposed to investment in the real economy", including "near historic P/E ratios for profitless stocks, NFTs, meme stocks and cryptocurrencies."

In consideration of this "highly levered system", Mr. Gross compares the Fed's task of raising rates "much like a drug addict would consider the steps for a healthy withdrawal. 'Cold turkey' in this case is definitely out, no matter what Powell says about inflation being his "top" and nearly only policy consideration." Instead of raising rates "rates too high, too soon," Mr. Gross recommends the Fed "stop at 3.5% but get there ASAP", and that investors avoid bonds and stocks, but consider Treasuries.

Full text of Bill Gross's May 26, 2022, Investment Outlook can be found at his website.

About Bill Gross

Bill Gross has been a pioneer in fixed income investing for more than 40 years. He co-founded PIMCO in 1971 and served as managing director and chief investment officer until joining Janus Henderson Investors in 2014. He retired in 2019 to focus on managing his personal assets and private charitable foundation. Throughout his career, he has received numerous awards, including Morningstar Fixed Income Manager of the Decade for 2000 to 2009 and Fixed Income Manager of the Year for 1998, 2000 and 2007. Mr. Gross became the first portfolio manager inducted into the Fixed Income Analysts Society's Hall of Fame in 1996 and received the Bond Market Association's Distinguished Service Award in 2000. In 2011, Institutional Investor magazine awarded him the Money Management Lifetime Achievement Award. Mr. Gross oversees the $390 million-asset William, Jeff and Jennifer Gross Family Foundation, which annually donates up to $21 million to non-profits involved in humanitarian causes, health care, and education. For more information or to view Investment Outlook archives, please visit https://williamhgross.com. For information about Mr. Gross's philanthropic activities through the William, Jeff and Jennifer Gross Family Foundation, please visit https://grossfamilyfoundation.com/. Order his new book "I'm Still Standing: Bond King Bill Gross and the PIMCO Express" on Amazon.com.