Thursday, February 28, 2008

Tresuries too skimpy, Gross says

With an expected 3% inflation rate in years out, Treasury yields look too skimpy, says Pimco's Bill Gross. But the Fed may have no choice but to keep rates low, regardless of inflation. He's starting to see value in agency-backed FNMA and FHLMC mortgages at 5¾% and SBA government-guaranteed loans at LIBOR+ 125 basis points.