Bill Gross says the Federal Reserve will raise interest rates in June. David Rosenberg says it may not happen until next year.

Its the biggest question in the financial markets: When will the Fed move? U.S. stocks are surging to records as benchmark borrowing costs near zero drive the hunt for returns. Treasuries are swinging the most on record. If only the experts could agree on when rates will rise.

Gross, the bond king who moved to Janus Capital Group in September from Pacific Investment Management, said the Fed will act because borrowing costs near zero are threatening to create market bubbles as investors send stocks and debt higher.

The Fed is willing at this point to at least acknowledge that by raising interest rates 25 basis points in June, he said Monday on Bloomberg Televisions Street Smart program hosted by Trish Regan in New York.

Rosenberg, the chief economist at Gluskin Sheff & Associates, said Fed Chair Janet Yellen will wait until inflation reaches its 2 percent target, and that may not happen until next year. She will be patient, he said on the same program. Rosenberg previously served as chief economist for North America at Merrill Lynch & Co.

The benchmark U.S. 10-year yield was little changed at 2.08 percent as of 6:55 a.m. in London, according to Bloomberg Bond Trader data. The price of the 2 percent note due in February 2025 was 99 10/32.

The worlds biggest economy is also sending mixed signals. The U.S. labor market capped its biggest three-month jobs gain in 17 years in January. Yet the Feds preferred gauge of inflation rose only 0.2 percent from a year earlier, short of the target, a Commerce Department report showed Monday in Washington.

Traders see a 17 percent chance the central bank will raise its main rate from a range of zero to 0.25 percent by its June meeting, according to Fed funds futures data compiled by Bloomberg. The odds have fallen from 44 percent six months ago.

To the extent that interest rates at the zero bound in the United States promote higher stock prices, higher bond prices, some of that trickles down to the real economy and promotes growth, Gross said. But to be fair, not much has. What has been promoted has been potential bubbles in stock markets and in bond markets.

The Nasdaq Composite Index closed above 5,000 for the first time in almost 15 years Monday while the Dow Jones Industrial Average and Standard & Poors 500 Index reached records.

Gains Doubled

Bloombergs USD High Yield Corporate Bond Index has climbed 3 percent in 2015, almost double the gain for the whole of 2014.

Treasuries are having their most volatile start to a year on record, based on the January-February performance of the Bank of America Merrill Lynch MOVE Index in data back to 1989.

To Rosenberg, its all about inflation or the lack thereof. Yellen in congressional testimony last month said she needs to see it over the 2 percent objective before raising borrowing costs.

Watching inflation is a race between watching grass grow and paint dry, Rosenberg said. Its going to be a 2016 story.