Bill Gross: ‘The Fed Knows Nothing’ – Exclusive Interview

Legendary investor Bill Gross isn’t pulling any punches. In his latest letter to the public, the superstar fund manager and co-founder of Pacific Investment Management Company (PIMCO) painted a rather challenging picture of the U.S. (and global) economy going forward.

“Recent events in the U.K., cracks in the Chinese property-based economy, war and a natural gas freeze in Europe, and a super strong dollar accelerating inflation in emerging market economies, point to the conclusion that today’s 2022 global economy in no way resembles Volcker’s in 1979."

S&P 500 Forward P/E Vs. 10-Year U.S. TIPS Yield Daily Chart

Source: Yardeni Research

Investing.com: You recently stated that the U.S. economy could withstand a 4.5% interest rate with only a ‘mild recession'; however, 5% would be the breaking point. Why do you draw the line at that particular point?

Fed's Balance Sheet