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Fed to Keep Funds Rate on Hold Longer Than Forecast, Gross Says

Pacific Investment Management Co.’s Bill Gross expects the Federal Reserve to keep borrowing rates at historic lows longer than the central bank has forecast to avoid disrupting leveraged global financial markets.

“When there is a lot of leverage in the economy, a central bank must tread lightly in terms of increasing interest rates,” Gross, manager of the world’s biggest bond fund, said on Bloomberg Television’s “Market Makers” with Erik Schatzker and Sara Eisen. “We think the Fed stays where they are, at 25 basis points, for a long, long time. Perhaps 2016 and beyond.”