Though Senate leaders on Wednesday agreed to a deal that would end the partial government shutdown and avoid a debt default, Pimco founder Bill Gross warned Treasury investors that this type of gridlock is likely here to stay.
"Dysfunction in Washington appears to be a permanent disease that ultimately should concern longer-term Treasury investors as to the volatility of Washington's debt," Gross told CNBC's "Street Signs."
In terms of Congress coming to a deal, he said the team at Pimco wasn't worried.
"The Treasury only had an interest payment on Oct. 31, it didn't really have anything to pay for the next two weeks, so the Oct. 17 [deadline] was sort of a red herring," he said.
"We were buying Treasury bills at 40 to 50 basis points. On $1 billion, as I've suggested before, does that mean a lot? A few thousand bucks but we were glad to buy them from BlackRock and Fidelity and to pick up those pennies which is something an active manager should do," he said.
Pimco is the largest manager of money market mutual funds in the U.S. The firm has nearly $2 trillion in assets under management.
Two weeks ago, Gross told CNBC the possibility of default on the part of the U.S. Treasury was "a million to 1, and perhaps even in the billions."
Gross warns that every time there is crisis like this recent gridlock in Washington, treasury yields go up and that costs the government and American taxpayers money. He said Treasury yields have increased 5 to 10 basis points because of this crisis.