PIMCOs Bill Gross Sees Federal Funds Rate a 3%

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The Economy

Tags: Federal funds rate, Pimco, Bill gross.

Opposition from the Federal Reserve's hawkish wing will likely limit a cut to the federal funds rate on Tuesday to 25 basis points, even though a bigger move would be helpful, Bill Gross, chief investment officer at PIMCO, the world's largest bond fund, said on Tuesday.
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Speaking via telephone from Newport Beach, California, to the Reuters Investment Outlook 2008 Summit in New York, Gross said the U.S. central bank could take additional measures today to ease current high LIBOR rates.

"There will be some significant changes in terms of either in the discount rate or the collateral that is allowed to be presented for discount, or other measures that will help to free up the LIBOR/swap yields," said Gross.

The final Federal Open Market Committee meeting of 2007 sees the Fed "divided," Gross said, with Chairman Ben Bernanke, Vice Chairman Donald Kohn and influential bank presidents like San Francisco's Janet Yellen opposed by "some significant new hawks" who are fearful of inflation.

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Submitted: Dec 11, 2007 Views: 475 Comments: 0 Likes: 1

View Article: http://www.boston.com/business/articles/2007/12/11/gross_fed_funds_...

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