The stock market is overreacting to what the Federal Reserve didn't say about quantitative easing in the minutes from its March meeting, bond king Bill Gross told CNBC Wednesday.
"It's much ado about nothing or much ado about a little," the founder of Pimco said. "We should think of the Fed as like a chess game where some of the pieces are more important than others," likening FedChairman Ben Bernanke to the king, San Francisco Fed governor Janet Yellen to the queen and New York Fed chief William Dudley to the castle, with the rest of the governors the knights.
"You have a story when some of these major pieces, one of the three, basically concedes and says, 'Check mate.' But we haven't seen that," Gross said. "Until that happens this wordsmithing...is relatively unimportant."
The Fed minutes released Tuesday showed central bank policymakers less keen to launch a fresh round of monetary stimulus as the U.S. economy improves.
The Fed and other central banks have "got to keep going [with some form of stimulus] if they expect equity markets to continue...at this level," he said.