Bill Gross, manager of the world’s largest bond fund at Pimco, ( took to Twitter to say the U.S. is, “approaching recession when measured by employment, retail sales, investment and corporate profits.”
He joins a slate of economists who think the U.S. is in a funk. A MarketWatch poll released late Monday suggests the growth expectation of economists for Q2 is now 1.3%., down from 2% just a month ago.
That poll was taken after disappointing June retail sales released this week; they fell for a third straight month.
The poor economic data and dampening mood may put more emphasis on the words of Fed Chairman Ben Bernanke as he readies his semi-annual policy report to Congress. He is scheduled to speak Tuesday to the Senate Banking committee at 10 a.m. ET, and Wednesday to the House Financial Services Panel..
And it may put more pressure on the Fed to signal some type of additional action — and not necessarily more quantitative easing.
Only two Fed officials said in the FOMC minutes released on July 11 that they support more QE; two more said they would consider it.
Of note, the minutes also suggest that several Fed officials want to develop “new tools” to take the pressure off the economy.
This week may a good time for Bernanke to take show off those tools if he has them at the ready.