Bill Gross, Pacific Investment Management company founder and CEO said today that he expects further interest rate slashes from the Federal Reserve.

“Should (Fed Chairman Ben) Bernanke put on a brave face and freeze rates in mid-descent, he risks exacerbating a housing crisis in the making. Yet, should he (thus) favor the homeowner, he risks reigniting speculative equity market behavior, and – in addition – a run on the dollar,” Gross said in a statement release today.

PIMCO’s view is that a U.S. Fed easing cycle historically has required a destination of 1 percent real short rates or lower. Under a conservative assumption of 2.5 percent inflation, that implies Fed Funds at 3-and-three-fourths percent or so during the next 6-12 months.

“That’s only two, 50 basis point reductions, something that could, but probably won’t, be accomplished by year-end,” Gross said. “The downward path of home prices will dominate Fed policy over the next several years as will the lingering unwind of related financial structures and derivatives that have yet to be discovered by the public, and marked to market by their conduit holders.”