famous investor Bill Gross He said he expects big problems in the future if the Fed continues to raise interest rates.
“The economy has been boosted by massive amounts of trillions of dollars in fiscal spending, but ultimately when that is used up, I think we’re in for a mild recession, and if interest rates continue to go up, we’ve got more than that,” Gross said Tuesday on CNB. bad “First Half Report.”
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“We have potential chaos in the financial markets,” he said.
According to Gross, tightening monetary policy will increase capital market turmoil. The so-called bond king and co-founder of Pimco referred to it on Tuesday The move in global bond yields next The Bank of Japan’s decision to expand the yield on 10-year Japanese government bonds.
Meanwhile, Gross said higher interest rates herald trouble for commercial real estate, which could face “potential defaults” in the future. However, he expects residential real estate to do somewhat better and not be affected to the degree it was during the Great Recession.
“I think, going forward, if the Fed continues to raise interest rates, the ability to equalize some of your housing, which is trending downward in price, is going to be very limited, and so that would be a warning to the public,” Gross said. With disaster, like in 2007 and 2008, I don’t think we’re destined there.”
While at Pimco, Gross helped manage the largest mutual fund in the world. Then he managed a fund at Janus Henderson Until he retired in March 2019.
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