Interest rates will stay low for a while, say PIMCO and Fed leaders

The CEO and co-CIO at Pacific Investment Management (PIMCO), Mohamad El-Erian, today told Bloomberg Radio he expects the Federal Reserve to keep interest rates low "for a long time" to heal a damaged financial system and an economy with no signs of rebound. PIMCO manages the world's largest bond fund; El-Erian, a former International Monetary Fund executive, previously managed Harvard University's endowment.

His remarks were echoed in similar remarks at the Commonwealth Club of California from Janet Yellen, president of the San Francisco Fed, who said it was "not outside the realm of possibility" that the Fed Funds rate would stay near zero for several years, Bloomberg News reported. While Yellen expressed optimism that things would turn up by year's end, she believed that the pace of recovery would be slow, and that risks remain.