Bill Gross, known as the Bond King for turning fixed-income trading into a powerhouse at PIMCO, is advising investors to avoid most bonds and favor one-year Treasury bills yielding 4.55%. In a Financial Times op-ed, Gross said government, mortgage and corporate credit had grown to about $84 trillion, while net federal debt reached roughly 100% of gross domestic product, a peacetime record. He also described borrowing by the artificial intelligence sector as a historical anomaly and warned that higher yields could pressure stock-market profit margins. The 10-year Treasury yield has risen more than 100 basis points since the Iran conflict began and reached 5.34% on Oct. 1, its highest level in 24 years. Foreign central banks are diversifying reserves, pension funds are allocating to private credit, and Japan has sold a net 3 trillion yen ($18.7 billion) of overseas debt through Aug. 22. Hedge funds have helped fill the demand gap through leveraged basis trades, with their share of Treasury holdings nearly doubling since 2023 to 8.5% and leveraged basis positions reaching about $830 billion. Gross favors ultra-short Treasury funds such as BIL and SGOV, while warning that long-duration funds including TLT and IEF could face greater volatility. He also said Alphabet, trading at about 17 times earnings, was an exception among AI hyperscalers valued above 20 times earnings.