Gross Says Jobs Report Implies Long-Term Bond ‘Bear Market’

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Bill Gross, manager of the $1.5 billion Janus Global Unconstrained Bond Fund, said a bigger-than-expected jump in U.S. payroll data implies a “bear market for long-term bonds.”

Payrolls climbed in May by the most in five months and worker pay accelerated, showing companies were upbeat about the U.S. economy’s prospects after an early-year slump. The 280,000 advance in payrolls exceeded the median forecast in a Bloomberg survey and followed a revised 221,000 April increase, figures from the Labor Department showed Friday in Washington.

Gross, speaking in an interview with Tom Keene on Bloomberg Radio, said there’s a 50 percent chance that the Federal Reserve will raise interest rates in September, as central banks are working to undo the damage low interest rates have inflicted on savers.

“What central banks are trying to do unbelievably is an operation untwist,” to create a “bear market in long-term bonds and keep short-term rates low,” he said.

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