Federal Reserve Likely to Increase Stimulus, Pimco’s Mather Says

The Federal Reserve is likely to increase monetary stimulus, including an expansion of its balance sheet, according to Pacific Investment Management Co., which oversees the world’s largest bond fund.

Growth in the U.S. will be constrained next year amid an “unprecedented amount” of fiscal contraction, Scott Mather, Pimco’s head of global portfolio management, said at a briefing today in Sydney. The Fed will start by changing its language before taking steps to bolster the economy including efforts to stabilize the housing market, he said.