Hello everyone and welcome to At Bairns. I'm Andy Surwer. And welcome to our guest, Bill Gross investor, the bond king. We're here at your house. Thank you so much for having us, Bill. It's great to see you.

It's great to see you. It's a great day. It's 85 degrees and nobody on the course.

Too hot for them, you think?

Yeah, they leave after Easter. They go to Chicago and they go to Seattle. They leave here.

But May is a good month.

Bill, let me ask you about the 10-year Treasury, which is at 4.5% now.

Hasn't been this high since 2007. That's a long time.

What does 4.5% on the 10-year tell us about where we are, how we got here, and where we're going?

Well, it tells us that inflation has gone up. You know, back in the day, two or three years ago, it was 1%.

Now, we're at 4.5%.

And so inflation has risen, and it's reflecting the future of inflation.

And to my way, you're thinking, you know, there's this debate about 4% or 5%. I'm in the 5%

camp, but it's basically a similar debate about inflation. Will it be two or will it be three?

You know, I think it's fairly evident that real industries will be higher than they were back in the day.

They couldn't get much lower.

So we're really talking about an inflation forecast of 2%, which is what the Fed wants,

3%, which is what, you know, many in the marketplace, including myself, I think is going to happen.

Why is that? Why is inflation persistent? Why is it higher? Why is it maybe higher longer?

Well, the government spends a lot of money. You know, we have annual deficits of $1.5 to $2 trillion,

which is 5 to 6% of GDP, which is close to historic ranges for a good period of time of economic growth.

And so, you know, it's the government spending. It's a fiscal spending coming out of COVID. It's the economy that's doing much better than people think at 3 to 4% in the last 12, 18 months.

What kind of job do you think Jay Powell has done?

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