Economists, Investors Clash on Fed Rate Outlook

Bill Gross, manager of the world's biggest bond fund, says Treasuries are a ``good buy'' because the Federal Reserve may reduce interest rates this year.
Neal Soss, chief economist at Credit Suisse Securities LLC, says bonds may add to last week's declines, the biggest since October, because the U.S. central bank will increase borrowing costs through 2006.
Gross, who heads the $90 billion Total Return Fund for Newport Beach, California-based Pacific Investment Management Co., and Soss, an economist on Wall Street for more than 20 years, are part of a clash between investors and analysts on the direction of the $4 trillion market for U.S. government debt. Treasuries lost 0.23 percent so far this month after returning 2.8 percent last year, the worst performance since 2003.

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