Wednesday, September 23, 2015

Pimco Forecasts Inflation Pick Up

As EPJ Daily Alert subscribers know, this is very much in line with my thinking.

From Bloomberg:
Pacific Investment Management Co. [a money management firm with over a trillion under management]says U.S. inflation will pick up -- at a time when the Treasury market is signaling the opposite.

Investors should brace for inflation gains and the prospect that the Federal Reserve may raise interest rates more quickly than forecast, according to Pimco, which runs the world’s biggest actively managed bond fund.

“Markets are probably pricing insufficient tightening by the Fed, based on our baseline forecast of above-potential growth and inflation getting back to the Fed’s 2 percent target over the next four quarters,” Richard Clarida, Pimco’s global strategic adviser, and Andrew Balls, the chief investment officer for global fixed income, said in a report Tuesday.



  1. Reuters headline from 9/22/15: Pimco: Fed 'may find it impossible' to escape lower bound of rates.

  2. It seem zero rates are causing excess capital goods investment which is producing more goods which is causing deflation. Global over investment is obvious. More money printing equals more deflation. The world is awash in over investment I am afraid the classical economists are in new territory.