Bill Gross: Recovery to remain 'puny'

Investors can expect more of the same, according to the 'Bond King' Bill Gross.

Andrew Van Sickle
By Andrew Van Sickle
published

Whether Bill Gross, the Bond King', who recently left giant fund manager Pimco, can live up to his reputation in his new job at Janus is yet to be seen. But "he remains one of the most educated, engaged and insightful students of markets", says Lauren Rublin in Barron's.

After the crash, Gross warned us to expect a weak recovery a new normal', as he called it. So far he's been right, and he doesn't expect that to change soon.

The US is unlikely to shift into a higher gear. The rest of the world is "at zero or less", and America isn't an island. It is also "still highly levered" (borrowing is high), while the ageing population reduces demand. "Most boomers need health care, but they don't need another house or a third car."

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Meanwhile, technology has hurt job growth "Apple is a wonderful company, but it doesn't hire as many people as the old General Motors" and globalisation appears to have hit its limits.

Central banks will have to keep interest rates "lower for longer", because of all this, and don't expect rates to return to their old highs. Bonds protect "against inflation and disaster", says Gross. "My low-growth outlook suggests [they] will earn their coupon."

Andrew Van Sickle
Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.

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