Bill Gross’s I-Told-You-So Moment Added Boost in Mexico
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Bill Gross’s prediction that the Federal Reserve would unwind its unprecedented stimulus slowly at a time when bond traders were bracing for a quicker reduction is paying some of the biggest dividends south of the border.
Mexico’s peso-denominated notes due 2024 surged this week, reducing yields by the most in 15 months, as the Fed on Sept. 18 refrained from curbing its $85 billion of monthly bond buying. The 0.34 percentage point drop is more than the 0.22 percentage point average decline in borrowing costs for emerging-market debt and halted a jump in peso bond yields since May as the Fed debated paring purchases. Gross’s Pacific Investment Management Co., which runs the largest bond fund, is also the biggest holder of the 2024 notes.