Mr Gross’ comments on financial exuberance echo a call from Christian Sewing, Deutsche Bank chief executive, who said on Monday that central banks should tighten monetary policy to provide “countermeasures” against surging inflation.

Mr Gross, who is now retired, said he was sceptical inflation would stay this high or accelerate further. He predicted, however, that it was likely to stay well above the Fed’s 2 per cent target for the foreseeable future.

Nonetheless, Mr Gross questioned whether the Fed and other central banks will – or even can – meaningfully tighten monetary policy to tame financial excesses and inflationary pressures because of the risk of causing market damage sufficient to imperil the economic recovery.

“They can’t do much,” he said. “I think [Fed chairman Jay Powell] is captive to the financial markets, and so he will gradually creep out of buying bonds, and next year he maybe gradually raises…

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