One-time “bond king” Bill Gross shared his opinions on what 2022 will bring for the markets and allocation calls in an exclusive interview with Citywire, saying that while inflation is a top concern, it’s not his only worry for next year.

Instead, he points to “fiscal drag” as a potentially major issue; as the Fed pulls back on the financial stimulus it poured into the markets at the start of the pandemic, growth could dramatically slow down. As the trillions of dollars of assistance gradually reduces to zero, the economy will need another injection over the next year, he tells Citywire. This risk, he says, isn’t being given enough attention by the media, or the markets.

One topic that is being given a lot of attention is inflation, and Gross says that’s warranted as supply-chain disruptions will continue to be knocked on by the rising Consumer Price Index (CPI), and could lead to interest rates going up to 3% or 4% in 2022.

As far as his own portfolio, Gross has invested heavily in entertainment companies this year, such as GameStop, where he netted $10 million during the meme stock craze, and movie theatre chain AMC. He’s also put money into natural gas pipeline partnerships, and focused on high-yielding stocks that have a defensive hedge. As for equity markets, Gross told Citywire: “I sense a sort of market top, which is through both cyclical and growth stocks, as it seems they are a little bit tired.”