Bill Gross has been investing in real estate investment trusts, also known as REITs. The Federal Reserve’s determination to fight high inflation will have a big impact on the residential real estate market, the founder of Pimco said on CNBC’s “Halftime Report” on Tuesday, calling the housing market “cautionary”. Specifically, if the central bank continues to hike rates, “the ability to recoup some of your housing that is falling in value will be very limited.” Still, he described the residential real estate situation as “slightly better” than commercial, and Bond King sees the potential for a 14 percent to 16 percent yield in mortgage REITs. Analy Capital Management and AGNC Investment Corp. are two of his favorites, he said, adding that he bought some of the former that day. “They’re based on 30-year mortgages that are around 6% to 5%,” he says of REITs. “Eventually if that’s spread between 30-year mortgages and 10-year Treasuries, 14%, 15%, 16% is a pretty good return.” Overall. , REITs are companies that own or finance real estate, or real estate-related assets, that produce income in the property sectors. Specifically, AGNC invests in agency residential mortgage-backed securities, while Annaly invests in and finances residential and commercial properties. AGNC 14 % yields, while Analy’s yield comes in at about 16%, FactSet. Gross said Analy and AGNC are both “volatile” but that the spread has widened “a lot.” Reduction covers. Earlier this year, Groth predicted that the Fed would not be able to raise interest rates above 2.5 percent without stifling the economy. He is now asking the central bank to stop the increase. Last week, the Fed said it would raise interest rates to 5.1% in 2023 before calling off the hike.