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Members of the U.S. Navy Blue Angels fly over the World Trade Center in lower Manhattan as part of the 25th annual Fleet Week celebration in New York, May 23, 2012. REUTERS/Eduardo Munoz

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Shreen Mohammad sits with other recruits during a military exercise at the Kabul Military Training Center (KMTC) in Kabul March 28, 2012. A landmark NATO summit in Chicago endorsed an exit strategy that calls for handing control of Afghanistan to its own security forces by the middle of next year but left questions unanswered about how to prevent a slide into chaos and a Taliban resurgence after allied troops are gone. Picture taken March 28, 2012. REUTERS/Omar Sobhani (AFGHANISTAN - Tags: POLITICS MILITARY SOCIETY) ATTENTION EDITORS: PICTURE 18 OF 27 FOR PACKAGE 'AFGHAN ARMY RECRUIT'

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PIMCO's Gross expects U.S. target rate at 2 percent in December

NEW YORK | Wed Jun 25, 2008 2:43pm EDT

NEW YORK (Reuters) - The fed funds target rate, which the Federal Reserve held unchanged at its policy meeting on Wednesday, will still be at 2 percent at year-end, the manager of the world's biggest bond fund said.

Speaking on CNBC television, Bill Gross, chief investment officer of Pacific Investment Management Co, or PIMCO, said that he expected core U.S. inflation would come down over the next 12 months, adding that the fed funds rate is neutral and will remain at 2 percent in December.

Gross said he believes the Fed is "jawboning appropriately" on inflation.

"There is still a lot of leverage to be unwound" in the U.S. and global economies, he added.

(Reporting by John Parry and Jennifer Ablan)
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