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Pimco co-founder Bill Gross, also known as the bond king, believes Donald Trump's victory in November's US presidential election would be more bearish for bond markets than Joe Biden's re-election, he said in an interview with the Financial Times.
“Trump is the most bearish of the candidates simply because his programs advocate continued tax cuts and more expensive things,” the famous bond investor said.
Gross also noted that the Biden administration has been responsible for trillions of dollars of deficit spending. Still, he believes Trump's election would be “more disruptive.”
Gross recently said that the “Total Return” bond investment strategy he helped create in the late 1980s is dead. “The culprit is the deficit; a $2 trillion (annual) increase in supply… will put some pressure on the market,” he told the Financial Times.
Instead, he prefers a closed-end fund that invests in preferred securities, contingent capital and up to 20% private credit, he said. saying.
As for the stock market, Gross said investors should “temper their expectations” rather than expect a repeat of the S&P 500's (SP500) 24% performance last year. “Over time, markets should reverse. To me, that means prices will rise less than they did.”
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