Vladimír Urbánek (Kurzy.cz)
Markets  |  August 30, 2012 10:15:01

Gross (PIMCO): On QE3 will soon even if Bernanke on Friday suggested nothing


According to world-renowned investor Bill Gross, who leads the investment company Pacific Investment Management (PIMCO), U.S. Fed relatively soon introduce additional monetary stimulus (QE3) even if his boss Ben Bernanke in Friday's long-awaited speech gave no indication.

PIMCO manages the world's largest bond fund with total assets at $ 270 billion. According to Gross, the main reason for another round of QE particularly unsatisfactory situation on the labor market. Fed Although quite successfully tame inflation, but can not be satisfied with the fact that long-term unemployment is kept above 8%, irrespective of the fact whether such an economy is growing unemployment or not. According to Gross, the Fed will further stimulate the economy until unemployment is close to 7% until inflation rises above the long-term target of 2%.

The first two rounds of QE the Fed bought during the period 2008 - 2011 government bonds totaling 2.3 trillion dollars. Holds key interest rate in the range of 0-0.25% since December 2008, and will continue to do so until at least 2014. Despite this list Bernanke recently stated that the Fed still has the option to use additional stimulus measures.

According to Gross, will have any further stimulation has only a limited impact on the bond market. According to his estimates, in the event of further stimulation 10-year government bond ended the year around 1.65%, which is close to current levels. Major change in U.S. government bond interest rates expected to Gross when the Fed began to raise interest or stopped buying these bonds.
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Gross (PIMCO): Na QE3 dojde brzy i kdyby Bernanke v pátek nic nenaznačil

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