Pimco co-founder Bill Gross doesn’t think inflation will hit 2% again in the US. He says it’s a “3-to-4 percent environment going forward for me.” He speaks during an interview on “Bloomberg ETF IQ.”
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Gross Doesn’t See Inflation at 2% Again
Renowned investor Bill Gross recently shared his views on the possibility of inflation reaching 2% again. Gross, who co-founded Pacific Investment Management Co (PIMCO) and is often referred to as the “Bond King,” believes that the traditional 2% inflation target may not be achievable in the foreseeable future.
Inflation, the rate at which the general level of prices for goods and services rises, has been a topic of discussion among economists worldwide. Central banks, including the US Federal Reserve and the European Central Bank, have been aiming to reach and maintain a 2% inflation rate. However, Gross diverges from this consensus, suggesting that factors such as slow economic growth, deleveraging, and disruptive technologies are likely to inhibit a return to 2% inflation.
Gross highlights the significant changes in the global economy over the past few decades. With technological advancements, the cost of manufacturing has decreased, leading to a decline in prices for various consumer goods. Additionally, the rise of e-commerce and online platforms has fostered price competition, limiting the ability of companies to significantly increase prices.
Furthermore, many countries continue to face economic headwinds, with Gross emphasizing the challenges of post-2008 financial crises and the ongoing COVID-19 pandemic. These economic downturns have caused high levels of debt, resulting in a need for deleveraging and austerity measures, further stifling inflationary pressures.
While central banks have been implementing accommodative monetary policies, including low or negative interest rates and quantitative easing, Gross argues that these measures have failed to produce the desired inflationary outcomes. Instead, they have mainly resulted in asset price inflation, benefiting mainly the asset-owning class.
Gross suggests that central banks may need to reconsider their inflation targets and shift their focus towards ensuring full employment and social stability. By altering the current narrative, central banks could potentially enhance economic growth and dynamism, albeit at the risk of increased income inequality and asset price distortions.
Market participants and economists continue to debate the future trajectory of inflation. Gross’s contrarian perspective provides a thought-provoking view on this topic. As the global economy evolves, it remains essential to closely monitor inflation dynamics and adapt policy frameworks accordingly.
Just take Fed funds to 10% for 12 mths and then slowly bring them down to 5% over 2yrs. Recession and deflation, sure, but now you see inflation is the worst outcome and deflation isn't such a bad thing.
Because it directly impacts people's cost of living, which they experience right away, inflation is much more destructive to people than a declining stock or real estate market. The severe pessimism of the market sentiment at this moment is not surprising. Help is essential if we are to live in the economy of today.
with so much debt, you will never see 2% again….
it's pitiful that the govt thinks it needs to put people out of work to curb inflation….
people working and producing stuff means MORE goods and services which means supply and demand are more in balance with keeping prices lower….
inflation is cause by big govt creation and distribution of fiat currency thru the Fed's manipulation of interest rates….
Raise those rates and keep them there.
CEOs make millions yet when the average person needs a good paying job so they can pay tent or buy a home, It's inflation. Something's wrong with the picture.
Bullshit. They said the same thing since 1971 till now
These investment managers are saying this because they want the fed to cut rates prematurely, it happened back in the day before vulcer came in and finished the job by raising rates.
I think they should shut up and take this period of low profits or they'll regret it alot more in the future when inflation rebounds to double digits.
US may be a special case – but for much of the rest of the OECD-countries and high-middle-income countries the deluge of upcoming mandatory pension savings are going to continue to drive down long term interest rates. This is especially true for the EU which can easily see ~1% interest rates again.
Good….maybe
REGARDING LABOUR MARKETS.
UNIONS
NO CCP PRACTICES IN MODERN ERA DEMOCRACIES AND MODERNIZATION GOLD STANDARD COMPLIANCE CHECKS AND BALANCES
COLLECTIVE BARGAINING.
ISSUES SURROUNDING FREEDOM AND SECURITY OF THE PERSON PARAMOUNT MOU FRESH START APPROACH. NO DICTATOR UNIONS THREATS OR INFRINGEMENT WILL BE OR MUST BE TOLERATED. IE STRKES WITHOUT JUST CAUSE. AND NO FEEDING ON FINANCIAL STATEMENTS.
BAD FOR BUSINESS.
ACEESS TO FINANCIALS ENTRUSTED.
NOT TO IMPROPERLY ENRICH YOURSELVES AND OTHERS.
DEROGATORY.
UNITED STATES IS NO IN NEED OR SHORT OF SURE KNOWLEDGEABLE PROFESSIONALS WITH JUST ADMINISTRATIVE ACTION DUE PROCESS OF GENERAL PROVISIONS OF INTERNATIONAL LAW ENTRUSTED SEAL CO-OPERATION AND CO-ORDINATION SOPHISTICATED ONLY AS STATED MOU PARAMOUNT SAID IT ALL DOMESTIC AND INTERNATIONAL JURISDICTIONS HON.GARY GENSLER AND THOSE FROM AMONG YOU THATS LAWFUL, REASONABLE AND PROCEDURALLY FAIR.
GOOD GOVERNANCE.
NATIONAL SECURITY BAR MUST BE RAISED
MR. DIMON
ZELLET LEADERSHIP.
MR. BILL GROSS.
LOTS THAT MEETS THE EYE.
HON JUSTICE ISMAIL CASSIM MANSOOR AKA LUKE MUST BE RESPECTED AND FULFILLED BY LAW
ENTRUSTED SEALS MUST BE RESPECTED AND FULFILLED BY LAW
Service inflation exists because many people refuse to put in a hard day of work but still demand lavish lifestyles. It is mainly the Europeans and Americans that push this entitled culture of no work and lots of play.
Not Enough Resources To Go Around Human Population Causes Inflation
Serious question, is Bill Gross still alive? If that’s how he looks after hair and makeup…
he looks like my precious from lord of the rings
Blame the worker billionaire Bill Gross….very on brand
He's not in Palm Springs, thats LA!
Wage increases stayed way below productivity increases for decades. To dump inflationary concerns on workers for a year or two of wage growth above inflation rate (which actually hasn't happened yet) sounds like the argument of capital owners for their own advantage.
Wages are at a 40 year low. Yall suck
4% inflation is the new normal.
Deficits, debt, and very low productivity. A bad, and quite inflationary, combination.
If the world is headed to higher inflation by historical standards with declining productivity, we have to reduce our consumption, or go through dramatic deflation, if only to enable the next generation to have as rapid an advance in lifestyle as we had. Society has come to expect too much for the government to provide.
I'm not a historian but I think this happened before.
Wages cause problems! Get out of here, old man. I will tell you what the big problem is. It is greedflation.
The market has been pretty bad but until today it decided to surge.Everybody was practically crying then. It kept dipping. That's what you get when you feel you can navigate the process on your own. Big thanks to Mrs Christine Morada. I'm not bothered with how bad the market is because my assets are insured due to her advice and I still receive profits.
Bill Gross: "Less pay for Workers = Progress."
No i don't see 2% that's not realistic. The Fed trying to reach 3% is a longshot too.
American dream is dead, forget it.
He like myself never imagined the corrupt democrat/ fedsters would print 9 trillion dollars of our money