The billionaire investor known as the "bond king" said that yields nowadays don't allow much room for price appreciation.
Only a handful of funds hold most of the short positions in Treasury futures.
By some key gauges, the expansion is as strong or even stronger than it was when the Fed began lifting rates.
The Fed chief made clear last week that he's now no longer singularly focused on crushing inflation.
Gross said bonds are unattractive as the U.S. government deficit swells.
Pimco sees rising shipping costs as complicating Fed policy.
There remains a disconnect between how much easing the market expects and what policymakers consider likely.
The pullback underscores how confident investors are that the Fed has brought inflation back under control.
"Finance-based capitalism depends on a positive yield curve," the Pimco co-founder said.
The Fed chairman forcefully pushed back on hopes of a rate cut in March.
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