Inflation and the Economic Road Ahead

It's obvious to me that the Fed wants out of QE,PIMCO founder,CEO and chief investment officer Bill Gross told CNBC.What we're seeing is an end to QE in October or November,and then a focus on the policy rate,a discussion that focuses on inflation rather than employment.*
Mohammed El-Erian's departure was a surprise to us.We're not exactly certain where he's going.We're disappointed that he's not gonna continue in a successor role to me.Mohammed and I have been good friends for 14 years.We're neighbours;he's just down the street.As to why he's leaving,I basically can't tell you.That's best left to him.
I don't think it had anything to do with performance.Perhaps like an architect he's moving to another house.We understand that he does want to take a break.He's gonna end up somewhere at a higher level.We now have six deputy CIOs under the structure Mohammed created.This is a sharing of ideas that will function more quickly and more responsive to the market.*
Global financial markets are still highly levered.The emerging markets are slowing down,and developed markets are responding.Mexico to me is still the best of the emerging markets.Its wages in the auto sector are just 15% of the US.Mexico is a hold that's just been caught up in the rest of the emerging markets.*
There's always a risk of inflation going forward.We're in an artificially enhanced market that won't necessarily give returns higher than inflation.I think we're fairly valued at 15 times earnings.We're OK as long as growth remains at least 2-3%,and I think it will,"the bond king" Bill Gross said.*
The Fed's key inflation gauge rose slightly in December.The PCE went from 1.1 to 1.2%,well within the Fed's stated goal of 2.0%.Personal income was flat,but personal spending increased at 0.4%,double the estimated increase of 0.2%.