Pimco's Bill Gross told CNBC in an interview Wednesday that the world's largest bond fund will continue to closely monitor the Federal Reserve's actions in the new year, because he expects his firm to greatly benefit from the central bank's inevitable exit from its unprecedented bond-buying program.
"Pimco's strategy is based explicitly on timing what the Fed is going to do," Gross said on "Closing Bell." "We think, for instance, that Janet Yellen's Fed, you know, is going to be focused on exiting QE. That's tapering and then exiting, and initiating a forward guidance policy, which encourages bond investors like Pimco to take its place."
But Gross said Fed Vice Chair Yellen, who will soon succeed Chairman Ben Bernanke, needs to encourage bond investors by anchoring interest rates at 0.25 percent, or 25 basis points, for "a long, long time." The likelihood of such a move will translate into outperformance for Pimco, he added.