PIMCO's Gross says "subprime crisis" not isolated

Reuters reports:

Bill Gross, manager of PIMCO, the world's largest bond fund, said on Tuesday the subprime mortgage crisis gripping U.S. financial markets was not an isolated event and will eventually take a toll on the economy.

Gross, the chief investment officer of Pacific Investment Management Co., or PIMCO, also said in his July investment outlook that the crisis would prompt the Federal Reserve to lower the benchmark interest rate by year-end.

"To death and taxes you can add this to your list of inevitabilities: the subprime crisis is not an isolated event and it won't be contained by a few days of headlines in The New York Times," he said.

Gross sees the 10 Year Note yielding 6.5% in the next 3 to 5 years.