UPDATE 2-PIMCO's Gross: Fed programs end may pressure debt

* Sees higher growth rates in the emerging economies

* Says U.S. inflation to stay low given excess capacity

(Adds further comment on emerging economies, inflation outlook)

By Jeffrey Hodgson

TORONTO, Oct 26 (Reuters) - Bill Gross, the influential manager who runs top bond fund PIMCO, warned on Monday that the prospect of an end to the Federal Reserve's debt buyback programs could add selling pressure to several credit markets, including U.S. Treasuries.

Asked about the risk that a recovering U.S. economy hurts Treasury investors, he said "there's not a heightened sense of concern, but there is some concern."

"It's obvious that the programs in the United States, the Federal Reserve buyback programs ... those purchases and that purchasing power will cease within the next three to four months," Gross told CBC News Network.

"So, to the extent that that's gone, then perhaps the upward influence in terms of those longer-term Treasuries will be felt more strongly in the next several quarters."

Gross, co-chief investment officer of Pacific Investment Management Co., also said a primary thesis at the firm is that emerging economies will grow faster than the United States.

"The emerging world, whether it's in Asia, Australia or other associated countries, will do much better from the standpoint of growth, and that's where money should eventually move to. It moves there because of higher profits and it moves there actually because of higher real interest rates," he said.

"The real interest rate in Brazil is 7 or 8 percent as opposed to zero to 1 pct here in the United States, so capital should migrate to emerging and high growth portions of the world and that's one of the ways that investors make money."

The high-profile bond fund manager also said he saw little threat of inflation in the United States, given the fallout of the global financial crisis.

"There's substantial excess capacity not just in terms of production but certainly in terms of employment," he said.

"That excess capacity will reduce the potential for inflation. We see inflation at zero to 1 percent for a number of years going forward."

PIMCO, a unit of German insurer Allianz (ALVG.DE), had $841.8 billion in assets under management as of June 30.

(Editing by Andrew Hay)