Skip to comments.Pimco's Gross Sees US Nearing Recession as BlackRock Sees Fed Step
Posted on 07/17/2012 7:31:09 AM PDT by Qbert
Bill Gross, who runs the worlds largest mutual fund at Pacific Investment Management Co., said the U.S. is approaching a recession as BlackRock Inc. expects the Federal Reserve to take more steps to support growth.
Five-year Treasury yields slid to a record 0.577 percent Monday after an unexpected drop in U.S. retail sales rekindled speculation Fed Chairman Ben S. Bernanke will use testimony Tuesday to hint at further monetary easing.
That followed data earlier this month showing American employers added fewer-than-estimated workers to payrolls. Goldman Sachs Group Inc. and Deutsche Bank AG cut forecasts for U.S. growth.
The U.S. is approaching recession when measured by employment, retail sales, investment, and corporate profits, Gross, who manages the $263 billion Pimcos Total Return Fund, wrote on Twitter.
Ten-year Treasury yields added one basis point to 1.48 percent as of 4:11 p.m. in Singapore, compared with the all-time low of 1.44 percent reached June 1. The MSCI World Index of shares rose 0.2 percent.
Retail sales fell 0.5 percent in June, figures from the Commerce Department showed Tuesday, exceeding the most pessimistic forecast in a Bloomberg News survey. U.S. employment increased 80,000 last month, according to a Labor Department report, trailing the 100,000 increase projected by economists.
Pretty much everything is way weaker, Ewen Cameron Watt, chief investment strategist at the BlackRock Investment Institute, told reporters in a teleconference from London. There will be some more action from the Federal Reserve, but not probably dramatic action in a sense of massive stimulus.
Goldman Sachs analysts led by Jan Hatzius cut their estimate for second-quarter economic growth to 1.1 percent from 1.3 percent, while Deutsche Bank chief U.S economist, Joseph LaVorgna, reduced his forecast to 1 percent from 1.4 percent.
(Excerpt) Read more at moneynews.com ...
The Roosevelt recession occurred about five years after he took office.
Can you say “80 Year, New Deal Bookends?”
We never recovered from the crash 2008, much less approach a new recession. This is just the existing situation worsening.