PIMCO’s Gross says fiscal tightening ‘momentum’ increasing

NEW YORK, May 20 (BestGrowthStock) – The fiscal tightening from
Japan, euro zone, and the United States will lead to slower
growth and lower inflation, which added selling pressure on
world financial markets on Thursday, the manager of the world’s
biggest bond fund said.

Bill Gross, the co-chief investment officer of Pimco and
manager of the firm’s Total Return Fund, told Reuters that
“fiscal tightening momentum” is increasing in almost every
corner of the world.

The International Monetary Fund on Wednesday pressed Japan
to begin a “credible” fiscal program which includes a 5 percent
sales tax increase, while French President Nicolas Sarkozy
proposed deficit “targets” for France, Gross noted.

Also, Germany passed this year a balanced budget amendment
mandating balanced budgets by 2016, he added.

Gross helps oversee over $1 trillion in assets, mostly
fixed income at the Newport Beach, Calif.-based Pimco.

Gross said Greece steals the spotlight. “The fiscal
tightening ahead for Greece and the peripherals is obvious and
for Greece, at least, is a condition of the IMF/European Union
future funding arrangement. Fiscal tightening momentum is
apparent in the U.S., examples being New Jersey and just this
week California. They are proposing budget slashes in the
billions.”

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(Reporting by Jennifer Ablan; Editing by Chizu Nomiyama)

PIMCO’s Gross says fiscal tightening ‘momentum’ increasing