(ZeroHedge.com) - Legendary 'Bond King' Bill Gross appears to have moved on from his years-long feud with his neighbor and has a warning for investors living in a "dreamland" or oasis thanks to global central banks' decision to pump trillions of dollars into world markets, resulting in a "dangerous" situation for overvalued financial assets.
Gross spoke with FT about ultra-low interest rates and central bank bond-buying programs that have spurred euphoria in stocks, bonds, crypto, real estate, and anything else under the sun.
"It's dangerous," Gross warned of loose monetary policy. "It's all dreamland that's been supported by interest rates that aren't where they should be."
Gross's comments are similar to Allianz Chief Economic Advisor Mohamed El-Erian, who warned Monday that the Federal Reserve is losing credibility over its transitory narrative after the US inflation rate accelerated to a three-decade high of 6.2% in October, which means the bank will need to act sooner than later.
Also, on Monday, Christian Sewing, Deutsche Bank's chief executive, said central banks would need to tighten monetary policy quicker as a countermeasure against soaring inflation.
Gross then questioned whether the Fed could tighten monetary policy due to all the financial excesses because such a decline in bond-buying purchases and interest rate hikes could create unwanted volatility across asset prices. He said such a move by the bank could cause market damages.
By Tyler Durden
