The Federal Reserve said on Wednesday it will extend the duration of a program to buy long-term government securities, and said the economy was showing signs of leveling out after 20 months of recession. Ken Volpert, portfolio manager at Vanguard Funds, and William Gross, co-CIO and founder of Pimco, shared their insights on the Fed’s decision.

Gross’ Outlook:

“Everyone knows we have an inventory pop coming in the second half and GDP will be positive,” Gross told CNBC.

“In terms of the Treasury buyback program, I think they’re trying to have it both ways—it looks like at the end of October they will end that particular program and continue with mortgages and agency purchases at least until the end of the year.”

Gross said investors have to be cautious as the Treasury still has up to $2 trillion to issue on a fiscal year basis.

“The Chinese are pulling back, the Asians are pulling back, the holders of reserves are pulling back so if the Fed itself ends the program that was $300 billion, then you have less demand going forward,” he said.

• Read the Fed's Statement
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• Who are the Biggest Holders of U.S. Govt Debt?

In the meantime, Gross said he recommends that investors look into short-term securities of AIG

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[AIG  Loading...      ()   ] and their subsidiaries that yield 10 to 15 percent.

“There’s about $40 billion of TARP money that’s backing them up for the next few years at least and that’s some good value,” he said.