US stimulus programme likely to continue to 2016

Bill Gross, manager of the world’s biggest bond fund, said the Federal Reserve is unlikely to slow stimulus and lift its target rate for overnight loans between banks until 2016 with employment growth insufficient.

“Based on these types of numbers” for payroll growth, the Fed’s “policy rate stays where it is until 2016,” Mr Gross, founder of Pacific Investment Management, said on Bloomberg Surveillance with Tom Keene and Mike McKee.

At this pace “there is not much room for more than 2% growth. The 10-year Treasury yield probably belongs at around 2.5%.”