Gross says odds of US recession may be 30% to 50%

By John Gittelsohn

The odds of a US recession may be as high as 50% following last week’s vote in the UK to exit the European Union, according to Bill Gross, manager of the Janus Global Unconstrained Bond Fund.

The yield on 10-year US Treasury bonds may fall to 1.25% from about 1.45% on Monday, Gross said. The lower yield would still be attractive to investors compared with negative interest rates in Japan or Germany. That spread could drive up the value of the dollar and increase the odds of a recession to the 30% to 50% range, according to Gross.