Bill Gross, who runs the world’s biggest bond mutual fund at Pacific Investment Management Co., said Bank of New York Mellon Corp.’s decision to charge clients for large deposits shows how the government’s efforts to revive the economy are distorting markets and hurting savers.
“The Swiss have done that but in the United States, it’s supposedly unheard of,” Gross said during a radio interview today on “Bloomberg Surveillance” with Ken Prewitt and Tom Keene. “I’ve earned 0.1 percent on my money-market account for about two-and-a-half years; it’s what is called financial repression, where interest rates are much lower than inflation.”
Gross, 67, manager of the $245 billion Pimco Total Return Fund (PTTRX), has said since May that savers have been hurt as theFederal Reserve has kept its rate at zero to 0.25 percent for three years. The policy, meant to keep market rates low and encourage borrowing, has also helped the government reduce the cost of servicing its debt, he said.
Continue here: Gross Says Banks Charging to Hold Cash ‘Unheard of’: Tom Keene – Bloomberg.
