Bill Gross Releases Investment Outlook, 'Carry On'

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Oct 06, 2022, 09:00 ET

LAGUNA BEACH, Calif., Oct. 6, 2022 /PRNewswire/ -- Legendary bond and fixed income investor William H. (Bill) Gross today released a new Investment Outlook, "Carry On". In his latest Outlook, Mr. Gross writes about the importance of interest rate "carry" in determining the depth of a recession caused by the Federal Reserve's interest rate hikes. "Almost all financial-based economic activity now depends upon this 'mother's milk' called carry," Mr. Gross says. "Without it economies reverse direction as witnessed in U.S. recessions of 2007, 2000, 1989, and 1980/82. The longer and wider the negative carry, the deeper the recession."

Mr. Gross believes current market expectations of a Fed Funds level of 4.50% in 2023 are too high, and if so, the 2 year note at 4.30% is too high as well, and high-quality Treasuries across the curve have – for now – reached a temporary peak. "My portfolio is increasingly leaning toward a small percentage of medium-term bonds," My Gross writes. "Would you believe that 5-year TIPS yielded a negative 150 basis points at the start of 2022 and now approach a positive 200 basis points? Not since 2006 (the year preceding the Great Recession's onset) have real yields been so high."

Full text of Bill Gross's October 6, 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.