Chair of the Board of Governors of the Federal Reserve System Janet Yellen raised the benchmark overnight federal funds rate by 0.25 percent today, marking the second time the U.S. central bank has raised its lending rate in three months. Both the Dow Jones Industrial Average and the Nasdaq Composite Index rallied on the news, with the Dow trading up 0.53 percent and the Nasdaq trading up 0.74 percent in its wake. Crude oil, gold, and the euro also rallied following Ms. Yellen's announcement and statement.

Given the positive reaction of markets to the news, Bill Gross, with Janus Capital Group, was quoted by CNBC that Yellen was "less hawkish than some had feared," meaning that the Fed chair may roll-out rate increases at a slower pace than some might have expected.

Still, further rate hikes are almost universally expected in 2017, and 2018. Michael Arone, with State Street Global Advisors expressed that the market was looking for "much more hawkish" language from Janet Yellen, and described the rally as "one of relief."

Yellen suggests three rate hikes possible in 2018

Mr. Gross cited talk about Yellen possibly raising rates twice over the coming 12 months, while the Fed gave guidance of three in 2018. Gross described a schedule of "40 to 50 basis points over the next year," The money manger stated that it appears that the Fed is seeing an "old usual economy," instead of a "new normal economy." With recent strong performance in both stocks and bonds cited, Gross was asked where is the "money coming from?"

The Janus manager stated that $80 billion is coming from the European Union on a monthly basis as a result of their central bank's quantitative easing program, injecting excess liquidity into capital markets.

He described European and Japanese traders "feeding" on U.S. treasuries as a result of attractive currency-converted yields, compared to their own nations' paper. The target federal funds rate is now 0.75 to 1.00 percent.

Bill Gross: ECB taper could cause 'hell to break loose'

Despite today's hike, Bill Gross suggested that Janet Yellen is "basically a dove at heart," which might suggest that the Fed chair will be expected to err on the side of a slower rate increase roll out, which would seem consistent with today's rally in stocks.

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Going forward, Mr. Gross pointed to Mario Draghi, the head of the European Central Bank, and the point in the future that "he begins to taper," which he sees starting in a "few months," reducing the $80 billion of liquidity currently added each month, and potentially causing "hell to break loose." He characterized this as "the most important" event for investors to watch, going forward.