I'd Rate Bernanke a 9 Out of 10 for Job: Bill Gross
It's not often you hear the head of the world's largest bond fund compliment the Federal Reserve for doing a good job while interest rates are near zero.
But Pimco founder Bill Gross told CNBC Wednesday he'd rate Fed chief Ben Bernanke a nine out of 10 for the job he'd done, even with rates driving some investors out of bond funds like Pimco's Total Return Fund.
"He’s gone through the Twist," he said, referring to Operation Twist. "He’s communicated that policy rates are gonna stay stable for the next two or three years. Perhaps there’s a quantitative easing down the road as well over the next few months. He’s elevated stock prices from very low levels. He’s produced an economy that's 2 percent to 3 percent in terms of real growth."
However, he pointed out, "you can’t really go much further than that, and I think he’s being frustrated at this point because you simply can’t drop interest rates any lower than zero."
Despite his high marks for Bernanke, Gross earlier told CNBC that the Fed's low-rate policy is killing credit and hampering the economic recovery.
He told CNBC there has to be some quantitative easing in the third quarter of this year because Operation Twist ends in June — the Fed or other central banks such as the European Central Bank , will have to start buying and buying "for a long, long time."