12/28/98 FOR THE RECORD: WILLIAM GROSS

FOR THE RECORD: WILLIAM GROSS

WILLIAM H. GROSS, manager of the $23 billion Pimco Total Return Fund, has been an unabashed ''bond bull.'' But he's growing cautious.
ON THE BOND MARKET: ''The bull market in [Treasury] bonds is done. There's only so much juice you can squeeze out of an orange, and I think we're about there.''
ON MUNICIPAL BONDS: ''There aren't that many no-brainers in the stock and bond markets, but this is one. Short of Congress enacting a flat tax, it's hard to conceive of a scenario where a muni won't outperform Treasuries. ''
ON INFLATION: ''As long as we have excess capacity and low commodity prices, I think inflation is dead. Well, it's not dead, but it's like a vampire in a casket--waiting to come out in the middle of the night. But that's years away.''
ON CORPORATE BONDS: ''The corporate market is a little risky here. We're going to have a slowdown, and that's never been a good time to hold corporates.''

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