Who Are These Guys?

Sensing a recovery, elite bond traders are roiling the markets--and borrowers are paying the price

Americans struggling to find work, get a decent pay raise or buy a home must marvel at the peculiar worries of Bill Gross. A legendary investor, Gross runs the $76 billion Pimco Total Return bond fund. In recent weeks he has sold $6 billion in Treasury bonds, activity that has contributed to a sharp rise in mortgage interest rates. Gross, though, is more concerned about bad things that might happen in the future, not what's happening now. "Two or three years down the road," he says, "inflation might be a real pressure cooker."

The prospect of a runaway economy complete with...

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