Bill Gross: Deficit Solution Unlikely Soon, Putting Dollar at Risk

“Real action on the US deficit problem is unlikely until the 2012 presidential election, a stalemate that is helping to make the stock market a better bet for investors than Treasurys, Pimco’s Bill Gross told CNBC.

Inaction on fiscal policy combined with real negative interest rates on most government-issued debt has chased Pimco from the Treasurys market, with the firm underweight on US debt and holding only shorter-term notes.

Yet Gross called market chatter that Pimco, whose Total Return offering is the largest bond fund in the world,  is lagging because it missed out on a Treasurys rally a “misconception” and insisted that the firm, which manages more than $1.2 trillion in assets, is outperforming its peers.”

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