Is the bond bull dead? "Old Debt King" warns: Get ready for a third consecutive year of losses!

Mr. Gross, the former chief investment officer of Pimco, known as the "king of old debt," said:Although the Federal Reserve has ended its interest rate hikes, the pain for bond investors is not over yet。

GrossexistAccording to an investment outlook report published on Thursday,The bond market is headed for an unprecedented third year of lossesThe reason is that inflation remains high and the redwordIt is expanding, and the government's fiscal spending is equivalent to "throwing money from a helicopter".

The "old debt king" retired from asset management in 2019,He has been urging investors to reduce their holdings of U.S. Treasuries and corporate bonds.

Gross isexistFed officials left the policy rate unchanged on Thursday while suggesting that,existAfter another interest rate hike this year, borrowing costs could increaseexistKeep it for longerexistHigher level.

US Treasuries extended losses in response to the Fed statement.The 10-year Treasury yield briefly topped 4.5% in early trading on Friday, reaching its highest level since 2007。Industrial foreign exchangeThe data shows that as of Wednesday, the 10-year Treasury bond has fallen 0.6% this year, afterexistIt fell by a record 12.5% in 2022.

Gross reiterated the points he had made earlier,that isWhy is that?that isIf the Federal Reserve cuts interest rates next year, the 10-year Treasury yield may not fall below 4%.

The first is the ever-expanding government deficitword, itsexistThe first 11 months of the financial year reached about $1.50 trillionexistBoosting consumer spending and making it difficult for the Federal Reserve to contain inflation.

On top of that, Gross also noted that about 30 percent of the outstanding Treasury bonds over $30 trillion willexistDue in the next 16 months. Plus the Federal Reserve isexistSelling about $1 trillion in bonds, he said:

“existWho would buy them at the current rate of return? "

In addition,existIt seems that this "old debt king",The price of 10-year Treasury bonds already reflects 2% inflationHe pointed out that historically,The 10-year Treasury yield is 1.35 percentage points higher than the federal funds rate。that isTo bring the policy rate down to 2.5 percent, "existIn a best-case scenario, the 10-year Treasury yield would also be close to 4%.

And finally.US interest rates could also be affected by foreign bond markets, including Japan, where yields remain "artificially" low。