Pimco's Gross: Fed Focus Will Be Quantitative Easing

The Federal Reserve left interest rates near zero and the decision to hold rates was 9-1, with Kansas City Fed President Thomas Hoenig dissenting because he wanted the central bank to eliminate a phrase vowing to keep rates exceptionally low for an extended period. Bill Gross, co-chief investment officer and founder of Pimco, shared his analysis.

“There have been dissents in the last 12 months, but I don’t think it’s significant,” Gross told CNBC.

“The path is clear in terms of the end of quantitative easing and the eventual raising of rates, but Hoenig is a well-defined hawk and to the extent that he is leading the charge out of the wilderness, I don’t think that is the case.”

Gross said until the lending markets and the labor markets start to show signs of improvement, “you’re going to continue to see this type of policy.”

“The important focus will be on quantitative easing,” he said. “The trillion and a half dollars worth of checks have importantly not only narrowed, lowered mortgage rates and all interest rates, but have benefited stocks as well..”

  • Watch Gross' Previous Appearance on CNBC (Jan. 13, 2010)

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Disclosures:

No immediate information was available for Gross or his firm.

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