NEW YORK (Reuters) – Bill Gross, manager of the world’s largest bond fund, said on Friday the decline in Treasury yields to 60-year lows reflect a high probability of recession in the United States.

Gross, the co-chief investment officer at Pacific Investment Management Co., which oversees $1.2 trillion, also told Reuters Insider television the U.S. is running out of monetary and fiscal policy options.

“It is increasingly apparent to us that policy options are limited and that economic growth is slowing down,” said Gross said.

Thursday, Morgan Stanley warned in a research report the United States and euro zone are “dangerously close to recession,” joining a number of firms that have slashed forecasts for global growth in the second half of the year. Not only are economists and investors bracing for a slowdown in the U.S., they are concerned about a deceleration in China’s growth rate to persistent sovereign-debt turmoil in Europe.

Morgan Stanley cut its global GDP forecast to 3.9 percent growth from 4.2 percent for 2011, and to 3.8 percent from 4.5 percent for 2012.

“There’s no doubt that (U.S.) growth from the standpoint of employment or unemployment and growth from the standpoint of corporate profits is definitely a risk — whether or not we see a positive 1 percent real GDP number I think is besides the point.”

Gross said low Treasury yields are flashing recessionary conditions.

NEW YORK (Reuters) – Bill Gross, manager of the world’s largest bond fund, said on Friday the decline in Treasury yields to 60-year lows reflect a high probability of recession in the United States.

Gross, the co-chief investment officer at Pacific Investment Management Co., which oversees $1.2 trillion, also told Reuters Insider television the U.S. is running out of monetary and fiscal policy options.

“It is increasingly apparent to us that policy options are limited and that economic growth is slowing down,” said Gross said.

Thursday, Morgan Stanley warned in a research report the United States and euro zone are “dangerously close to recession,” joining a number of firms that have slashed forecasts for global growth in the second half of the year. Not only are economists and investors bracing for a slowdown in the U.S., they are concerned about a deceleration in China’s growth rate to persistent sovereign-debt turmoil in Europe.

Morgan Stanley cut its global GDP forecast to 3.9 percent growth from 4.2 percent for 2011, and to 3.8 percent from 4.5 percent for 2012.

“There’s no doubt that (U.S.) growth from the standpoint of employment or unemployment and growth from the standpoint of corporate profits is definitely a risk — whether or not we see a positive 1 percent real GDP number I think is besides the point.”

Gross said low Treasury yields are flashing recessionary conditions.

, July 16 (Reuters) – Billionaire investor George Soros on Friday said the just-passed U.S. financial overhaul bill will impose new regulations on the banking system before the banks have recovered sufficiently to cope with new restrictions on their activities.

“The banking system still needs to earn its way out of a hole,” Soros said at a panel discussion at the Hamptons Institute in East Hampton, New York. For Reuters Insider video: link.reuters.com/nyz87m

In that sense the bill has come “too early.” While Soros said of the bill it “is good to have it done,” he said the new legislation “doesn’t address the problems in the system.”

Turning to financial markets, Soros said the Treasury bond market suggests “no inflation” and indicates “no growth.” The benchmark 10-year U.S. Treasury note US10YT=RR has been a huge beneficiary in the flight to quality, with its yield falling to 2.93 percent from 3.00 percent on Thursday.

Soros said “cutting the stimulus and cutting the unemployment benefits, cutting the aids to states, which are losing tax revenues and therefore have to cut services and employment” come at a time when the U.S. economy is fragile.

“When the demand comes back, you will see it with bank lending and interest rates beginning to move up. That’s the time to cut back — not now,” he said, referring to fiscal stimulus.

Soros joined Elizabeth Warren, professor of law at Harvard University, at the panel discussion on “Restoring the Integrity of the U.S. Financial Markets.”

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, the manager of Pimco, 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,” Bill Gross told Reuters Insider television soon after 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 on 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 U.S. central bank took pains to draw the distinction between the discount rate and its target for the overnight interbank rate, its main monetary policy tool. That rate remains unchanged near zero percent as a fragile U.S. economic recovery struggles to gain traction.

“Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve’s lending facilities,” the Fed said in a statement.

“The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy,” it said.

Gross, who as co-chief investment officer at Pimco helps oversee over $1 trillion in assets, said it is unlikely the Fed will begin a tightening phase during a period of elevated unemployment.