The Janus Capital fund manager and Pimco founder added that negative yields promote bubbles and, to some extent, distort capitalism.
It's not the same as it was in 2000, but it's "certainly an overvaluation that might, at some point, be corrected," Gross said on CNBC's "Power Lunch."
He said negative interest rates "confiscate capital" and cause people to mindlessly pile into equities.
"There is a translation mechanism that the central banks are willing to endure," Gross said.
Read MoreGross takes aim at central banks
"What we've seen over the past few months, the initiation of quantitative easing in euroland and the continuation of quantitative easing in Japan, [is] huge amounts of money, which liquefy markets and which promote an upward drift in equity markets all around the world," he said.