Bill Gross of PIMCO spoke to Bloomberg T.V. on Thursday and said that he was doubtful of another round of quantitative easing in June, but “if we see some weak employment reports over the next two months, then QE3 is back on.” He also said that there’s a risk of a double-dip recession “if liquidity disappears.”
As if on cue, the Commerce Department said Friday that the economy grew at an inflation-adjusted annual rate of 2.2% in the first quarter of 2012, a marked slowdown from the 3% growth rate at the end of 2011.
PIMCO CEO Mohamed El-Erian then weighed in with Bloomberg T.V.’s Betty Liu, saying that the Federal Reserve is likely to provide additional assistance if the economy weakens further, but there is “no immediate need” to do so.
El-Erian also said that the U.S economy needs to add 250,000 to 300,000 jobs every month if we are to “seriously start reducing unemployment to something that is acceptable,” but that “the labor market is cooling off and doing so too early.”
In his comments on Thursday, Gross (left) went on to say that “euro land is a dysfunctional family … more dysfunctional than Democrats and Republicans in Washington, DC.”
“We certainly do not want that,” Gross added when asked about the potential breakup of the euro zone. “A break up produces disastrous short-term consequences. I think markets know that and policymakers know that, too. “