Pimco’s Gross Says to Focus on Inflation Not Jobs

In his latest investment letter, Gross called inflation “the runt of the Fed’s litter but one that promises to turn a sow’s ear into a silk purse for those who watch it closely.”

In fact, the bond guru said that if both inflation and inflationary expectations remain tame in 2014, bond investors could expect a total return of 3% to 4%. He conceded that this level of gains is not as high as what bond investors had grown accustomed to in the past few decades. But he also expects less volatility.
“Bond investors will be less rich, but more placid in 2014,” said Gross, who also reiterated his love for short-term bonds. He used a seesaw as a metaphor.
“If you’re on the wrong end of an interest rate teeter totter headed up, it makes you wonder why anyone would own bonds, or at least why anyone would own longer-term bonds,” he wrote in his letter.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza