NEW YORK (Reuters) - The manager of the world's biggest bond fund, Bill Gross, said on Wednesday there is less doubt about the Federal Reserve's understanding of the global liquidity crunch after it and other central banks unveiled a plan to bolster credit availability.

"There is less doubt today than yesterday that the Fed understands the illiquidity problem in the credit markets," Gross, who is chief investment officer of Pimco or Pacific Investment Management Company told CNBC television.

He said central banks' liquidity program, which will start on Monday, is a big step toward bringing down the interest rates on U.S. 30-year mortgages.

"This should reduce the fed funds/Libor spread and begin to lower yields on the highest quality echelon of the credit markets -- including, importantly, 30-year mortgage rates," Gross told Reuters in an email.

Libor or the London interbank offered rate, a key benchmark for global short-term borrowing costs, is trading at an atypically wide spread over the fed funds target rate, the short-term lending rate the U.S. Federal Reserve sets.

"It is important to understand, however," Gross said, "that this is a reinsurance policy on liquidity and not risky assets."

Gross said he expected the Fed to continue cutting its fed funds rate, the key U.S. overnight lending rate.

Referring to the impact of central banks' new liquidity measures, Gross said "I don't think it changes the near-term outlook for the economy."

"Now, however, despite the limited size -- $40 billion in the first two auctions -- the program should begin to induce the private market to begin lending to each other as their liquidity concerns are reduced," Gross told Reuters.

Short-term interbank lending rates have been elevated as borrowing conditions tightened after credit market turmoil first erupted in August.

(Reporting by John Parry, Richard Leong and Jennifer Ablan; Editing by James Dalgleish)