Bill Gross, known as the "Bond King" and co-founder of Pacific Investment Management Company (PIMCO), indicated that the real federal funds rate may reach its bottom around mid-2027. Following the Jackson Hole conference, he has adopted a moderately bearish position on 10-year U.S. Treasury bonds.

In a post on the X platform, Gross noted that interest rate market movements following the Jackson Hole meeting suggest the federal funds rate will decline to a 3% floor in approximately two years. "If that's the case, then a 4% yield on 10-year U.S. Treasuries is possible. However, considering the trillions of dollars in future supply, a 4% yield is truly difficult to envision," he stated.

Gross advised investors to maintain a "moderately bearish" stance, projecting that 10-year U.S. Treasury yields will fluctuate between 4.15% and 4.45% over the coming months. He also noted that current yields are "not attractive, particularly after accounting for taxes."

The 10-year U.S. Treasury yield currently stands at approximately 4.3%. Year-to-date, the 10-year Treasury yield has declined 6.3%, though it remains 13.1% higher compared to the same period last year.