Bill Gross, manager of the world’s largest bond fund at PIMCO, predicted that the Federal Reserve will implement additional monetary easing measures when the current “Operation Twist” program ends in June.
In an interview with Bloomberg, Gross said that he sees the Ben Bernanke-led central bank launching a “twist on another twist going forward.” Specifically, the PIMCO founder said that the Fed will turn its attention from U.S. Treasuries to mortgage securities in order to keep borrowing rates near all-time lows.
Echoing those sentiments on Wednesday was Peter Boockvar, chief equity strategist at Miller Tabak. Writing for Minyanville.com, where he is a contributor, Boockvar noted the following about Fed Chairman Bernanke and U.S. monetary policy:
Bernanke last night continued his good will tour on ABC News explaining to all his belief that current policy is the right thing for the tenuous economy. He’s implied over the past week in various speeches that he’s afraid of repeating the Fed’s mistake of early tightening that led to the recession of 1937-1938. Unfortunately, as seen in the mid 2000’s, there will never be a good time to reduce monetary largesse for an economy that has been conformed to be so highly dependent on the cheap funding of the Fed.