The Fed may delay the rate cuts until next year because the economy is showing signs of strength that will prove temporary, Gross wrote in a report published on the Web site of his firm, Pacific Investment Management Co. The Fed on Sept. 18 lowered its target for the overnight lending rate between banks for the first time since June 2003, to 4.75 percent from 5.25 percent.
Housing Will Fixate Fed for Years!
Bill Gross, manager of the world's biggest bond fund, said falling home prices will be the main driver of U.S. monetary policy for ``several years,'' and repeated his forecast the Federal Reserve will lower the federal funds rate to at least 3.75 percent in the coming 12 months.
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