More On Interest Rates

Mohammed El-Erian from the PIMCO Fund was on CNBC this morning and was talking about how rates need to come down because it will hurt the overall economy if they don’t. PIMCO is the world’s biggest bond fund.  So is he saying this because it’s in his best interest?  I am sure that is part of it but the other part of it is that he is probably right.  I know interest rates will increase but this increase overnight.  Interest rates are still low by historic standards but this is going to put some buyers on the sideline due to all the talks of them coming back down to the 5% to 5.25% range. 

“The prospect of higher interest rates already has begun to spook stock investors. Some have been taking money off the table as they wait to see how bond traders and the government react to the many dynamics influencing the debt market.”