Published on Wed, Jun 24, 2009 at 09:28 | Source : CNBC-TV18
Updated at Wed, Jun 24, 2009 at 20:07
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Fed may stick to low-rate scenario: Pimco
Paul McCulley of Pimco said he expected the US Federal Reserve to adopt a 'dovish' view. “The Fed is likely to point out a very low rate scenario. Fed rates may stay low for an extended period," he said.
Q: How durable are these signs of recovery that you are seeing right now?
A: I think we will statistically have something better than an L, because we will move from a dark to the sunny side of inventory cycle and that will give you addition by elimination of subtraction in the GDP (Gross Domestic Product) accounts, but I don't think you have a real recovery, something that is worthy of being talked about on main street, till you move from job destruction to job creation, and that is some distance down the road.
Q: So you do agree with the World Bank and its assessment that we are not on the fast pace to recovery in 2009 just yet?
A: We are not in a recovery yet, we are still contracting, just at a slower pace, but I think that the commercial real estate side could be a headwind. The debate should be about the headwinds we face as oppose to the things that are going to send us back into the cesspool again.
