Bill Gross says August’s jobs data ensure the Federal Reserve will raise interest rates this month. Pacific Investment Management Co., his former firm, says the central bank will wait. Bond traders are on the fence.
“September is on — I don’t think it’s 100 percent on, but I think it’s close to 100 percent,” Gross, manager of the Janus Global Unconstrained Bond Fund, said in an interview with Bloomberg Radio. ”If these types of jobs don’t do it, I’m not quite sure what does.”
Pimco, the firm Gross co-founded and left in 2014, disagrees.
“It’s kind of a weak report across the board, so it doesn’t change the view we’ve had that September is very unlikely,” Scott Mather, chief investment officer of U.S. core strategies and a managing director at Pimco, said in a Bloomberg Radio interview. “But then of course that makes December much more likely after that.”
The remarks come after a Labor Department report on Friday showed employers added 151,000 positions last month, following a 275,000 gain in July that was larger than previously estimated. The median forecast in a Bloomberg survey called for 180,000 additions. The jobless rate and labor participation rate held steady, while wage gains moderated and hours worked were the lowest since 2014.
For a quick roundup of analyst reaction to the report, click here.
Mixed U.S. economic data in the past week pushed traders to pare wagers on a 2016 hike after Fed Chair Janet Yellen said on Aug. 26 the case for higher rates had strengthened. Minutes from the central bank’s July meeting showed policy makers divided on the matter.