Bill Gross Is Concerned If There Will Be Sufficient Liquidity If A 'Panic Situation' Arises Again

Stanley Fischer, Federal Reserve Vice Chairman, on Tuesday said that the Fed is on track to raise rates when it sees "further improvement" in labor market and inflation.

Legendary bond investor and portfolio manager at Janus Capital Group Inc JNS, Bill Gross was on CNBC to discuss if Fischer's comments are a sign of Fed raising rates sooner. Gross also discussed why he is concerned about liquidity in the markets.

Will Hike, But Gradually

"I think they're going to raise rates once in 2015," Gross said. "I think it's because not because of economic reason or because of inflation, but because they simply need to get off of the zero dime. They need to show that the economy in the United States and elsewhere can exist and can prosper with interest rates that are non-zero and, so I think we are going to see a hike, but it's going to be very gradual.

"I didn't see anything different in terms of Fisher's statement today."

Liquidity

Gross was asked why is he concerned about the liquidity in the financial markets currently. he replied, "During certain segments in the past few years and certainly during the Lehman situation, we saw illiquidity. We saw institutions and individuals deleveraging reducing positions and liquidity just wasn't there. At that time, the Fed provided liquidity as the buyer of last resort. But now, the Fed is in a more limited position."

"They're not able to address the situation like they have in the past. Certain regulations and rulings by the Justice Department in terms of AIG and otherwise suggests that the Fed will not be the same significant player in the future, and so basically, the market is depending upon itself for future liquidity and I wonder during a panic situation...whether or not liquidity will be sufficient," Gross concluded.