### EXCLUSIVE: Peter Palfrey, co-portf......>

US TSYS: ### EXCLUSIVE: Peter Palfrey, co-portf mgr of $6.5Bln Loomis Sayles

Core Plus Bond Fund, told MNI exclusively he likes TIPS over nominal Treasuries

since Fed's Quantitative Easing policy and similar moves by BOJ, ECB have made

Tsys "very expensive" vs. where they'd be "if the Fed had not grown its bal.

sheet from under $900B pre-fincl criss to over $4.2 Trln." But he adds "part of"

Tsys bid occurs on "persistently lower than target" US and global inflation. He

believes as Fed keeps going with "Taper (Quantitative Tightening)" and

normalizes "monetary policy through additional Fed Funds hikes," Tsy yields

"will gradually push higher." 

- He adds it's "likely" higher nominal yields "will likely also push real yields

higher as well, although we believe that they will likely rise less quickly,

allowing TIPS to outperform nominal Treasuries over the next 12-18 months.

Transient factors that have recently reduced core and headline inflation

(energy, wireless price cuts among others), may give way to upward pressure on

wages and import price pressures in subsequent quarters." (More)