As the Federal Reserve slashed a key interest rate by half a point on Wednesday, Pimco's Bill Gross said he expects rates to hold or decline to 1 percent.
Gross also said bond investors want to buy what the government is buying.
"The Treasury is buying agency mortgages in the secondary market as well as bank capital preferred stocks via the TARP," he said.
The government may extend the reach to subprime mortgages and insurance and auto companies, Gross said.