Cutting Interest Rates May Not Be Enough: Gross

Cuts to interest rates may not be enough in and of themselves to boost the economy, Pimco's Bill Gross said on Wednesday.

"The Fed Funds rate at 1 percent is still not low enough," he told CNBC's Erin Burnett. "Perhaps the Fed will have to look at other measures aside from lowering interest rates to 50 basis or zero to stimulate the economy."

Although money markets are healthier, Gross said, the long-term and corporate credit markets, commercial mortgages and high-yield bonds are in "disarray" as they sell in the "teens if not in the twenties and thirties."

(See the accompanying video for the full interview.)

"Government bailouts might calm credit markets, but make it apparent that common stock holders are holding an incredibly short stick," he said.

Gross also said the Treasury Department should not have revised its $700 billion bailout plan, though he believes it should do more to assist homeowners.

"They're the original problem, and the continuing problem emanated from the housing market," he said.

More FOMC Analysis on CNBC.com:

  • Breaking down the FOMC Minutes, with CNBC's Steve Liesman
  • Fed Officials Slash Outlook for Economy Through 2009
  • CEOS Urge Stimulus Plan