Bill Gross wants the Federal Reserve to end its zero interest rate policy immediately.

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In his monthly letter to clients, the widely followed bond fund manager at Janus Capital said the US central bank's aversion to normalizing rates is having negative effects throughout the economy, but primarily to savers and investors.

"The developed world is beginning to run on empty because investments discounted at near zero over the intermediate future cannot provide cash flow or necessary capital gains to pay for past promises in an aging society," wrote Gross, who manages the USD 1.4 billion Janus Global Unconstrained Bond Fund.

His latest screed against Fed policy comes six days after the Federal Open Market Committee voted once again to keep its key funds rate near zero. The rate has remained there since late 2008, a move meant to provide support to the economy during the Great Recession but kept there long since the accompanying financial crisis ended.

Read More: The Fed has to deal with its own zombie apocalypse

Gross cited a litany of losers under zero rates—pension funds, insurance companies and 401(k) investors, primarily—who will see lower returns ahead unless the Fed starts to normalize.

"Expecting 8-10 percent to pay for education, health care, retirement or simply taking an accustomed vacation, they won't be doing much of it as long as short-term yields are at zero," he wrote. "They are not so much in a pickle barrel as they are on a revolving spit, being slowly cooked alive while central bankers focus on their Taylor models and fight non-existent inflation."

The Fed, though, isn't fighting inflation, as in days of Former Chairman Paul Volcker, who famously engineered a spike higher in rates in the early 1980s to thwart it. Instead, the Fed is looking for a healthy level of inflation, a search that so far has been unsuccessful, prompting the FOMC to keep the zero-bound rate while disinflation persists and global growth remains a concern.

In Gross' view, though, monetary policy has lost its bite.

While providing much-needed liquidity during the financial crisis and a 200 percent or so boost to major US stock market averages, economic growth has remained tepid and corporations remain reluctant to commit huge sums of capital to their core businesses.

"If companies can borrow close to zero, why wouldn't they invest the proceeds in the real economy? The evidence of recent years is that they have not," Gross said. "Instead they have plowed trillions into the financial economy as they buy back their own stock with a seemingly safe tax advantaged arbitrage.

"But more importantly, zero destroys existing business models such as life insurance company balance sheets and pension funds, which in turn are expected to use the proceeds to pay benefits for an aging boomer society." Up until a month or so ago, the Fed had been expected to use this month's meeting for a decidedly gradual liftoff from zero.

However, the environment for a 2015 move looks difficult now that the FOMC passed on September. Fed funds traders assign just a 35 percent chance to a December move and a 45 percent probability in January, with March 2016 now the most likely candidate at 60 percent.

Read More: Fed's window for 2015 rate hike is closing quickly

Gross thinks the delay has been a mistake.

"Will 2 percent fed funds harm corporate America that has already termed out its debt? A little. Will stock and bond prices go down? Most certainly," he said. "Near-term pain? Yes. Long-term gain? Almost certainly. Get off zero now!"

First Published:Sept 23, 2015 10:14 PM IST