Pimco's Gross: Fed move is not start of tightening cycle

NEW YORK, Feb 18 (Reuters) - The Federal Reserve’s surprise move on Thursday to raise the interest rate it charges banks for emergency loans does not mean that a full-fledged tightening cycle has begun, Bill Gross, the manager of the world’s biggest bond fund, told Reuters.

“I don’t think it’s the beginning, really, of a tightening from the standpoint of monetary policy,” Gross told Reuters Insider television soonafter the Fed’s decision. “I don’t think it is the beginning of an increase in the fed-funds rate or in terms of interest on reserves that has been discussed as well.”

Late Thursday, the Fed cast its decision to raise the discount rate to 0.75 percent from 0.5 percent as a response to improved financial market conditions that warrant less of a helping hand from emergency programs introduced by the central bank during the 2008 global financial crisis.

The Federal Reserve went to pains to draw the distinction between the discount rate and its target for overnight interbank rates, its main monetary policy tool, which remains unchanged near zero percent as a fragile U.S. economic recovery struggles to gain traction.

Reporting by Jennifer Ablan