The world’s biggest bond dealers dispute Bill Gross’ assertion that the $9.13 trillion market for U.S. Treasuries offers little value.
Bloomberg reports Monday that while Gross, who runs Pacific Investment Management Co.’s (PIMCO) $236 billion Total Return Fund, is betting against government debt, the 20 firms that trade with the Federal Reserve predict yields on the benchmark 10-year Treasury note will hold below 4% for a third straight year for the balance of 2011.
“I could join the dealers and say the 10-year’s not going to go to 4%, so what am I left with?” Gross said in a telephone interview with Bloomberg April 20. “I’m left with an under-yielding, less-than-inflation security. I have better choices. As a firm we’re not going to put up with it.”