Bill Gross Warns Flattening Yield Curve Portends Slowdown Ahead
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Source: BFW (Bloomberg First Word)
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William Hunt Gross "Bill" (Janus Capital Management LLC)
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(Bloomberg) -- The Fed can’t raise interest rates too much further before potentially slowing economic growth, Janus Henderson Group fund manager Bill Gross says on Bloomberg TV.
- Treasury yield curve from two to 10 years, currently at ~72bp, usually has to flatten to zero to signal a recession, but that may not be the case this time around, he says
- “In a highly levered economy with a lot of debt, and that typifies the U.S., we don’t have to go flat, perhaps another 20 to 30 basis points of tightening would be enough in order to induce certainly a slowdown in the economy”
- One scenario that could see the curve to flatten to his target would include the fed funds rate climbing another 50bp and the 10Y yield another 10bp, Gross says
- See earlier story: Bond Traders Pile Into Fed-Proof Bet as Trump’s Pick Nears
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
William Hunt Gross "Bill" (Janus Capital Management LLC)
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UUID: 7947283