While President Donald Trump's economic plan may provide some growth, the real driver of the country's economic expansion is productivity, bond guru Bill Gross told CNBC on Friday.
And he's not convinced that will pick up as much as is necessary.
"Productivity needs to grow at least by 2 to 3 percent, because the labor force is only growing at a half a percent," the manager of the $1.7 million Janus Global Unconstrained Bond Fund said. "I'm skeptical."
Gross said Trump's program is based on a number of themes, including deregulation, which he believes has the potential to increase growth to some extent. He also thinks the president's fiscal spending programs will extend growth in the short term.
However, because growth is dependent on productivity and productivity depends on corporate investment and innovation, Gross doesn't necessarily foresee the expansion Trump is promising.
"Corporations basically have had the cash and the money to invest if they wanted to. The question is whether the future environment promotes that," he said.
In addition to deregulation and fiscal spending, Trump's plan calls for personal and corporate tax cuts and a repatriation of corporate cash from overseas.
Gross has been critical of Trump, telling investors in a December letter that Trump will add to a "long-term global debt crisis."
"There's no doubt that many aspects of Trump's agenda are good for stocks and bad for bonds near-term — tax cuts, deregulation, fiscal stimulus, etc.," Gross wrote at the time. "But longer term, investors must consider the negatives of Trump's anti-globalization ideas which may restrict trade and negatively affect corporate profits."
Trump was sworn in as the 45th president of the United States on Friday.
— CNBC's Jeff Cox contributed to this report.