(Bloomberg) -- Bond yields and risk spreads were too low two months ago and global markets that were too levered are now derisking, according to Bill Gross, manager of the world’s largest mutual fund at Pacific Investment Management Co.

Gross’s $285 billion Pimco Total Return Fund led declines among the most-popular bond mutual funds earlier this month after the Federal Reserve sparked a global selloff in bonds by indicating it may start reducing asset purchases known as quantitative easing, or QE.

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