PIMCO Co-Founder Bill Gross Says 10-Year Treasury Yield Could Spike To 5% Soon

Renowned investor and the former PIMCO co-founder, Bill Gross anticipates the 10-year Treasury yield could reach 5%.

According to a CNBC report, Gross attributes this to an oversold market due to increased anticipation of Treasury supplies and prolonged higher rates from the Federal Reserve.

Witnessing a significant sell-off, the stock market was shaken on Tuesday as bond yields soared. The S&P 500 fell 1.4%, achieving its lowest point since June, while the 10-year Treasury yield hit a 16-year high.

The benchmark yield has seen a substantial rise in the past month, peaking at 4.8% as the Federal Reserve commits to maintaining elevated interest rates. The 30-year Treasury yield also spiked to 4.9% on Tuesday, marking its highest since 2007.

See Also: Warehouse Manager Retires After $8K Shiba Inu Bet Reaps Him $500K — What If He Had Held On To SHIB?

Gross points out that future yield movements hinge on inflation and economic growth indicators.

Gross, once dubbed the “bond king,” highlights the significant influence of the Fed’s aggressive rate hikes since March 2022 on the yield curve, resulting in the highest interest rates since 2001.

He also notes the current struggle investors face due to the escalating Treasury deficit, which stands at over $2 trillion. This is impacting long bonds, as evidenced by recent ETF sell-offs, according to Gross.

Read Next: From Strong Dividends To Big Government Contracts: Why B Of A Analyst Is Bullish On Booz Allen Hamilton

Image via Shutterstock