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Pimco ditches US treasuries
THE world’s largest bond fund, the Pimco Total Return fund, has sold off all of its US Treasures due to worries about the government’s ballooning budget deficit, which is forecast to reach $1.65 trillion this year. In his most recent monthly report, Pimco founder Bill Gross asked: “Who will buy treasuries when the Fed doesn’t?” His fund’s dumping of treasuries was executed speedily last month: they moved from making up 12 per cent of its assets at the end of January to zeo by 28 February. Gross expects the yield on treasuries to rise as the US over-spend continues.