Pacific Investment Management Co.’s Bill Gross said he expects the Federal Reserve won’t tighten monetary policy until 2016 at the earliest.
Treasuries had their biggest two-week gain in almost a year as Federal Reserve Chairman Ben S. Bernanke said the central bank wouldn’t slow its monthly bond-buying program unless economic conditions warrant.
“So bonds come out of their coffin & it’s not even Halloween,” Gross, who manages Pimco’s $268 billion Total Return Fund, said in the posting on Twitter. “Bernanke says follow policy rate & we agree.”
Ten-year yields retreated from the 2013 high reached July 8 as Bernanke told congressional panels last week it was “way too early to make any judgment” about whether the central bank, the biggest buyer of Treasuries, will starting cutting back in September. The proportion of U.S. government debt in Total Return, the world’s biggest bond fund, rose to 38 percent in June, from 37 percent in May, according to data on Newport Beach, California-based Pimco’s website.