Bond guru Bill Gross' frustration with the Federal Reserve intensified Friday after Chair Janet Yellen suggested the central bank may consider purchasing other asset classes should another recession appear.
The Fed's thinking stems from a trickle-down notion of monetary policy that suggests great financial wealth leads directly to higher investment in the real economy, Gross said on CNBC's "Power Lunch."
"The evidence of the past 15 years in Japan and certainly in the past six years in the United States suggest otherwise," said Gross, manager of the Janus Global Unconstrained Bond Fund.
"I continue to be disappointed by her focus on financial markets, close to negative interest rates and now the potential for purchases of corporate bonds and stocks at some point. "
In a speech earlier Friday, Yellen said the case for raising rates has strengthened in recent months.
In talking about possible future actions by the Fed should it opt to do stimulus, she said policymakers might "chose to consider additional tools that have been employed by other central banks."
"For example, future policymakers may wish to explore the possibility of purchasing a broader range of assets," she said.
Gross has long criticized the Federal Reserve's near-zero interest rates and what he says is bank's focus on asset prices when determining if it should raise rates.
"The Fed, with their focus on low interest rates, is distorting the savings function, not only in the United States but on a global basis, and savings of course is connected to investment," he said. "Ultimately I think that's what reduces real economic growth going forward and they don't realize that."
As for when that next hike may be coming, Gross thinks ifAugust's job growth number is "decent" then "for sure or close to for sure" the Fed will raise rates by 25 basis points in September. The jobs report is issued next Friday.
—CNBC's Jeff Cox contributed to this report.