Bill Gross Predicts Limited Bull Market for Stocks Amid Treasury Struggles
Newport Beach, Thursday, 26 June 2025.
Renowned investor Bill Gross forecasts a modest stock market bull trend and challenges for Treasury yields, driven by inflation and fiscal deficits. Investors must watch these dynamics closely.
Current Economic Landscape
In the latest market analysis, Bill Gross, an influential figure in the financial sector and former executive of PIMCO, forecasted a nuanced future for the investment landscape [X]. Gross’s outlook suggests a ‘little bull market’ for stocks, which he attributes to the burgeoning technology sector and the inevitable rise of artificial intelligence companies [1][3]. On the other side, he envisions challenges for Treasury bonds, citing a possible ‘little bear market’ due to prevailing economic factors such as fiscal deficits and a weakening dollar [X][2]. This commentary is particularly timely given the current economic shifts.
The Challenge of Treasury Yields
The U.S. Treasury yields, according to Gross’s projections, are set to face downward pressure due to economic headwinds. He predicts that the 10-year Treasury yield will struggle to dip below 4.25% amidst ongoing fiscal deficits and a persistent inflation rate driven by geopolitical and domestic factors [2][X]. Currently, the yield sits at 4.31%, reflective of these pressures [X]. This situation underscores the complexities that bond investors are likely to navigate in the near term.
Inflation and Its Impacts
Central to Gross’s predictions is the impact of inflation, expected to be sustained above 2.5%, on the broader economic landscape. This persistent inflation is further fueled by deficits and an increase in bond supply, which together place a burden on the broader economy [1][3]. These elements could maintain inflationary pressure, further complicating efforts to stabilize Treasury market fluctuations.
Stock Market Supported by Technology
The forecasted stock market growth aligns significantly with the robust performance of technology firms, especially those with exposure to artificial intelligence. Companies such as Nvidia, AMD, and Broadcom have shown resilience and upward momentum in stock valuations, driven by their critical roles in the AI sector amidst ongoing geopolitical uncertainties [X]. This trend suggests a partial shielding of the equity markets from broader economic downturns, according to Gross [1].