PIMCO: 25% Chance of Deflation in U.S.

Filed under: Forecasts

A senior official overseeing the world's largest bond fund says there is a 25% chance that the United States will encounter deflation and a double-dip recession.



"I do not think the deflation and double-dip is the baseline scenario, but I think it's the risk scenario," Mohamed A. El-Erian, chief executive officer for Pimco, told Bloomberg News Thursday. He added that U.S. unemployment will probably stay unusually high.



El-Erian said companies accumulating cash and saving by individuals are making it tougher to fight deflation. In June, the U.S. savings rate rose to 6.4%.

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PIMCO: 25% Chance of Deflation in U.S. originally appeared on BloggingStocks on Thu, 05 Aug 2010 17:10:00 EST. Please see our terms for use of feeds.

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