CHICAGO -- The Federal Reserve will not officially launch a third round of quantitative easing to help boost the flagging economy, but will rely instead on a “magical weapon” -- the language of its policy statements to try to keep interest rates historically low for an extended period, PIMCO money management titan Bill Gross said Wednesday at the Morningstar Investment Conference.

“What I think the Fed will do is basically keep yields relatively low via language,” Gross told attendees at the Chicago gathering. “The language will be the new QE3 -- it won’t be a purchase program… That’s a magical weapon to keep real interest rates down at these levels.”

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