Janus Capital bond maestro Bill Gross is out with his latest Investment Outlook:
The latest missive from Gross touches on themes he's emphasized before. He writes that the Fed seems intent on raising the Fed funds rate if only to prove they can begin the journey to 'normalization'.
The Fed 'should' raise rates in September, he says, but it might be a "one and done" hike, at least for the next six months.
The larger problem, he warns, is that low rates are no longer conducive to saving and investment while governments continue to push austerity rather than stimulation.
Global fiscal (and monetary) policy is not now constructive nor growth enhancing, nor is it likely to be. If that be the case, then equity market capital gains and future returns are likely to be limited if not downward sloping. High quality global bond markets offer little reward relative to durational risk.