"In a post on X on Friday, the cofounder of Pimco also acknowledged Wall Street's anxiety over the past week about problems lurking in banks' loan books. Disclosures on Thursday from Zions Bancorporation and Western Alliance Bancorp about dodgy borrowers came after JPMorgan CEO Jamie Dimon pointed to the collapse of auto lender Tricolor as a "cockroach" that likely signals more are hiding elsewhere."
"But Gross said that move was overblown and instead expects yields to surge well above Friday's close around 4.01%, given how much fresh debt the federal government must issue to cover budget shortfalls while growth is poised to cool sharply from current estimates of more than 3%. "10 year Treasury has no business below 4% though 4.5% more like it - too much supply/deficits despite slowing, soon-to-be 1% growth economy," he said."
Gold has surged more than 50% year-to-date and doubled since early 2024, with silver, platinum, and palladium posting even larger gains. Investors have pursued a debasement trade into precious metals and bitcoin amid rising sovereign debt and skittishness about global currencies and the dollar. Recent disclosures from regional banks about problematic borrowers, plus memories of Silicon Valley Bank's collapse and the Tricolor auto-lender failure, rattled markets and briefly pushed the 10-year Treasury below 4%, sending stocks tumbling. Heavy federal borrowing to cover budget shortfalls and an expected sharp slowdown in growth should drive Treasury yields well above 4%, potentially nearer 4.5%.
Read at Fortune
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