The Beige Book

The Beige Book is a document that summarizes comments received from business and other contacts outside the Federal Reserve. This book is not a commentary on the views of Federal Reserve officials.

Pimco: The Death of Bonds

Pimco believes that the best days for bonds are over. The three-decade rally in bonds will eventually fizzle out. The rally will come to an end as nations sell record amounts of debt to fund their deficits, spurring a return of inflation and rising interest rates.

This pessimistic outlook for the bond market is driving Pimco out of its comfort zone from bonds into equities. El-Erian is currently planning for equity investments.

Euro Bears Vanish

The European Union have been tackling the budget deficits for all its members. This has had a positive effect on its currency in the medium term. With the macroeconomic data improving in the European region and the macroeconomic condition being lackluster in the US, confidence is returning to the Euro.

The return of confidence is due to the PIGS (i.e. Portugal, Ireland or Italy, Greece and Spain) successful auctioning of 17 billion bonds. This positive news from Europe is in contrast with the weak economic growth seen in the US.

Euro rose by more than 0.5% to $1.2974.