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First on CNBC: CNBC Excerpts: Janus Capital Group's Bill Gross on CNBC's "Power Lunch" Today

WHEN: TODAY, TUESDAY, April 21, 2015

WHEN: CNBC'S "POWER LUNCH"

Following are excerpts from the unofficial transcript of a FIRST ON CNBC interview with Janus Capital Group's Bill Gross on CNBC's "Power Lunch" today. Following is a link to a clip of the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000373053.

All references must be sourced to CNBC.

Gross on High Amount of Leverage:

When a butterfly wing flaps, then something can happen. We remember that back in 1987 with portfolio insurance. The market went down 25 percent in one day. That's a flash crash. And it was instituted basically by one firm believing in portfolio insurance that didn't really work when liquidity dried up. So these things happen. It's really a function of leverage and the ability I suppose of one individual or one firm to impose their will on the market for a short period of time.

Gross on Making a Stand:

I don't think rigged is the proper word. That's a dangerous word in this environment. I think the market is highly leveraged. And when you have buyers and sellers that are sensitive to very small price movements, in terms of flash trading, as Michael Lewis has pointed out, then some buyers can stand aside or some sellers can stand aside, and you can see significant price movements based upon the inherent leverage within the system to which investors, buyers or sellers, are unwilling to make a stand.

Gross on Not Fighting the Fed and ECB:

Investors know that you shouldn't fight the Fed and you shouldn't fight the ECB either. Mario Draghi is buying 60 billion dollars worth of euro bonds throughout the zone on a monthly basis and perhaps 25 percent of that is German credit. So the question is why fight, why short.

Gross on a Question of When:

A nine or a ten year Bund has an upside of one and a half points if you buy it as it moves to minus 20 basis points. I know it sounds complicated. It has a downside perhaps of 10 or 15 points. It's just a question of when. It's just a question of when. It's certainly a trade that doesn't cost you anything in the short term because it doesn't yield anything. And it has an ultimate potential of 10 or 15 percent over a one or two year period of time.

Gross on Rates:

With inflation the same five years from now in terms of expectations you got 200 basis points of spread to narrow between German Bunds and US treasuries. What does that amount to? It amounts to 10 or 15 percent on a particular trade. If levered – maybe you don't do as well as Soros and Druckenmiller but it comes close.

Gross on Risk and Reward:

Draghi's committed to this for 18 months. And he's good as gold. Perhaps his word is as good as gold. You know he could also at some point say hey, we've run out of German Bunds to buy and so we'll buy something else. Or we'll curtail the program. So there's just a lot of risk and reward and it's all levered on the side of reward as opposed to risk.

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