Market Rescued From 'Armageddon': Pimco's McCulley

Paul McCulley of Pimco told CNBC that he believes the new role of government in the markets may be for the best.

“Armageddon has been cut off as a fat-tail risk. That’s not going to happen; we’re getting the right response from Washington,” said McCulley, managing director at the world's biggest bond fund.

“As we get through this recession we’ll see a new union, if you will, between the invisible hand of the market and the visible fist of the government,” said McCulley.

However, with the moderation of high risk comes the curtailing of rewards, he said. McCulley cautioned investors to expect profit growth to decline as the economy deleverages.

And he urged U.S. legislators to remember that the government and markets must have a "happy" symbiosis.

McCulley was joined by Jack Bogle, Vanguard Group founder and Bob Doll, BlackRock vice chairman. (Watch the video above to see Bogle, Doll & McCulley's comments.)

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Disclosure information was not available for McCulley or Pimco.