Echoing similar sentiments he made earlier this week, PIMCO chairman Bill Gross said Thursday that quantitative easing by the Fed “destroyed” credit creation. He also said he’d like to “see something bold” from President Barack Obama in his speech Thursday night, noting the markets will be disappointed if stimulus is below $300 billion.
“This is really a cost of credit versus a creation of credit type of argument,” Gross said on Bloomberg Television’s “Surveillance Midday“. “There is no doubt that by purchasing longer-dated Treasuries that they would probably lower the cost of credit. My argument is the creation of it would it be destroyed and has been destroyed over the past several years during QE1 and QE2.”
When asked about his investment outlook, Gross responded that a “freezing” of policy stimulus and interest rates in both in the United States and Europe will occur. He suggested government incentivize companies to buy American and produce American jobs.