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Pimco's Gross Says Market Selloff Doesn't Portend Recession

CNBC.com
Tuesday, 27 Feb 2007 | 5:05 PM ET

Renowned bond investor Bill Gross said the selloff in the stock market has been overdue but it doesn't translate to a U.S. or a global recession.

Gross, who expects the Federal Reserve to start cutting interest rates in June or July, expects bond yields to remain steady until then.

Bond Allocation
Raising cash-equivalent holdings and waiting for the Fed funds rate to fall, with William Gross, PIMCO CIO & Founder and CNBC's Maria Bartiromo

He said fixed income investors should stay at the front of the yield curve. "You want to invest in high quality bonds and that's where the Fed will prop interest rates the most," Gross said.

Gross said Japan's fixed income market offers the best opportunity for fixed income investors. "The Japanese market is quite attractive and I expect it to do quite well."

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