Bond investor Bill Gross warned Tuesday that easy monetary policy has exacerbated a disconnect between the financial and the real economy, increasing risks for investors.
"Don't be mesmerized by the blue skies created by central bank QE and near perpetually low interest rates. All markets are increasingly at risk," Gross, portfolio manager at Janus Henderson, said in his June investment outlook.
Major central banks have bought trillions of assets in a measure known as quantitative easing, or QE, and kept rates near zero or just below in an effort to help regional economies recover from recession in the last decade. However, many worry that low rates have pushed financial markets to unsustainably high levels while real global economic growth remains sluggish.
The World Bank forecasts that global growth will stay below 3 percent through at least 2019, after slowing to 2.4 percent last year despite extraordinarily accommodative monetary policy. As a result, global central banks have increasingly called for stimulus, or direct economic investment, for growth to pick up.