Remember, the Fed only targets the low end of the yield curve with any ability (literally overnight lending), and sometimes it doesn't even do that well. Just l

Remember, the Fed only targets the low end of the yield curve with any ability (literally overnight lending), and sometimes it doesn't even do that well. Just look at the spread between the the overnight rate and the target rate to see how far off they are at times. Anything past that down the curve is far more driven by economic forces and inflation (which, yes the Fed does control/target however you want to word it, but only really pathetically). Even the 30-day paper whips around far more than the Fed has handles on. Gross is just hurt because he's getting dragged across the coals lately. Never take advice about markets not working / being irrational / etc. from somebody underwater. Corollary: never listen to how the markets are brilliant / doing the right thing / blah blah from somebody holding a winning position either. Find the guys who are getting taken to the cleaners and trying to understand why and reevaluating their situations. You'll learn a hell of a lot more from them.