Thursday, October 28, 2010

Update: PIMCO's Bill Gross has called end of bond rally before

by Bill McBride on 10/28/2010 01:42:00 PM

Yesterday I mentioned that Bill Gross was calling the end "of a great 30-year bull market in bonds". I thought he was changing his view, but this isn't the first time (ht Erik):

From Bloomberg on March 27, 2010: Pimco’s Bill Gross Says Bonds Have Seen Best Days

“Bonds have seen their best days,” Gross said in a Bloomberg Radio interview ... Yields on two-year U.S. Treasury notes are likely to rise to 1.25 percent to 1.5 percent from 1.08 percent in the next year as the economy strengthens and the Federal Reserve begins to increase interest rates, Gross said.
On March 26, 2010 the Ten Year Treasury yield was 3.86% (now 2.65%)

And from Reuters in June 2007: Pimco's Gross says he's now a "bear market manager"
Gross forecast that benchmark Treasury yields will range higher than previously thought, prompting him to acknowledge he is now a "bear market manager" after a quarter of a century as the global bond market's most powerful bull.
On June 7, 2007, the ten year Treasury yield was 5.1%.

So Gross has called the end of the bond rally before. Nevermind.

The end of the "bull market in bonds" really depends on if the economy strengthens, and I don't see a pickup in economic growth any time soon.