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Pimco's Gross: Rates To Hold Steady Or Decline More

As the Federal Reserve slashed a key interest rate by half a point on Wednesday, Pimco's Bill Gross said he expects rates to hold or decline to 1 percent.

Gross also said bond investors want to buy what the government is buying.

"The Treasury is buying agency mortgages in the secondary market as well as bank capital preferred stocks via the TARP," he said.

The government may extend the reach to subprime mortgages and insurance and auto companies, Gross said.

Companies like Ford Motor and General Motors , for instance, are attractive, he said. (See accompanying video for more.)

Meanwhile, government foreclosure relief programs are a question of fairness, he said.

“It’s not a good thing for the government to write checks in the trillions of dollars; we will have inflation,” said Gross. “But, it’s certainly a fair thing and it balances out Main Street and Wall Street.”

Gross also pointed out the Fed’s concern that weakened global economies will hurt demand for U.S. exports.

“It basically says not just the United States but the whole world has a problem here,” he said. “Not only the U.S. but other central banks must go low and stay low.”