A future of interest rates near zero means slower but steadier growth, according to Pimco head Bill Gross.
Separately, Gross brushed aside criticism of discontent at his firm that arose around the departure of top deputy Mohamed El-Erian.
"This company is thriving in 2014," Gross said. He also called Pimco a "happy kingdom" and said the press had mischaracterized the situation.
Gross, founder and CIO of Newport Beach, California-based bond manager Pimco, said the new environment would be a "new neutral," a riff off Pimco's post-financial crisis economic prognostication of "new normal" low growth.
"We expect [markets] to be relatively stable—not that there won't be ups and downs and 10 percent corrections and those types of things—but if the Fed and other central banks stay low and the differential is closer to zero than 2, then we've got a market to at least take some measured risk and earn a decent return," Gross said Thursday at the Morningstar Investment Conference in Chicago.
Gross said he expects 3 percent to 4 percent returns in the bond market and 4 percent to 5 percent gains in stocks.