“The U.S. economy doesn’t look headed for recession in the next 12 months, but it’s no sure thing, says Bill Gross, co-chief investment officer at Pimco.
“That importantly depends on the global environment — Euroland, and how quickly they come out [of their recession,] and China, that vast mystery of growth that supposedly grows forever at 7.5-8 percent,” he told CNBC.
“I would watch those two areas to see whether or not the U.S. will be ultimately affected,” he added,
As for financial markets, “we’re not looking at Armageddon, but we’re looking at an increasingly risky environment.”
And why is that? “Because real growth has not been produced by these quantitative easing measures, and some day there will be consequences,” Gross explained.
Asked whether the stock market’s rise to record highs stems more from the Federal Reserve’s easing or improving corporate fundamentals, Gross said it’s both.
“Stock prices have been artificially elevated by the Fed’s check buying, no doubt,” Gross noted. …”
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