Gross cuts US treasuries ahead of crucial Fed announcement

PIMCO's Bill Gross, the manager of the world's biggest bond fund, has cut his stake in US Treasuries by 12%, ahead of a crucial meeting by the Fed later when it may announce further quantitative easing.

Gross slashed US government debt in PIMCO's $272bn Total Return fund to 21% last month, down from 33% the previous month, the lowest level since October last year. "QE lowers real interest rates and raises nominal rates because their intent is to reflate," Gross wrote in a Twitter post earlier today. Pimco's founder and co-chief investment officer said any rally in Treasury bonds would be limited, adding even with a third round of QE from the Fed, Treasury yields "have practical limits." He added that 1.50% on the 10-year note is "a good common-sense bottom." Pimco kept emerging...