Bond guru Bill Gross says Janet Yellen is overly concerned about inflation, and that will hurt the world’s biggest bond market.

Fed Chair Yellen raised the benchmark U.S. interest rate Wednesday and said policy makers are confident inflation will accelerate toward their 2 percent target over the medium term. The gauge has been stuck near zero all year. Gross, the former manager of the world’s biggest bond fund who’s now at Janus Capital Group Inc., said costs will stay low.

“She refuses to acknowledge it.” Gross, who is based in Newport Beach, said in an interview Wednesday. “Treasuries are attractive. But they can’t be that attractive if Janet Yellen continues to insist” inflation will get to 2 percent shortly, he said.

Treasuries fell Wednesday after the Fed announcement and climbed back Thursday to recoup most of the losses. The benchmark 10-year note yield declined three basis points to 2.27 percent as of 10:49 a.m. in Tokyo, according to Bloomberg Bond Trader data. The 2.25 percent note maturing in November 2025 rose 7/32, or $2.19 per $1,000 face amount, to 99 26/32.

U.S. government securities have returned 0.8 percent this year, with the gain slowing from 6.2 percent in 2014, according to Bloomberg World Bond Indexes.

Fund Ranking

The Janus Global Unconstrained Bond Fund, which Gross manages, has fallen 2.1 percent this year, beating 60 percent of its competitors, according to data compiled by Bloomberg.

Yellen isn’t giving enough weight to Japan, commodity prices and European Central Bank policy, which are all helping keep inflation in check, according to Gross. Japan and Europe are both buying bonds in their regions to try to stave off deflation. The Bloomberg Commodity Index dropped to a 16-year low on Wednesday.

“She’s an old fashioned central banker and she needs to modernize her, and and her staff’s, thinking,” Gross said.