The head of the European Central Bank said on 3-7-11 that he is ready to raise rates because inflation is too high. (That was before Japan’s earthquake.) Bill Gross, the biggest bond fund manager in the world, dumped all of his Treasury bonds in February because he feels the rates are too low and he wonders who will buy all the Treasury debt (at today’s low rates) when QE2 is over. He said Treasury yields are artificially low by about 150BPs because of QE1 and QE2, based on expected nominal GDP growth of 5% this year.
Exerpt from Brick & Associates Commentary
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