Billionaire Jeffrey Gundlach, aka “The Bond King,” expects the Federal Reserve to raise interest rates at its March meeting next week, “which will be the last hike, Gundlach added, “This will be the last hike. In addition, Gundlach also warned that ” At the Federal Reserve, inflationary policy is back on the table.”
Jeffrey Gundlach, CEO of DoubleLine, on Fed rate hikes
Jeffrey Gundlach, CEO and chief investment officer of investment management firm DoubleLine, discussed his forecast for a Fed rate hike in an interview with CNBC on Monday. Gundlach is known as the “Bond King” because he was on the cover of Barron’s in 2011 as the “New Bond King.” His net worth is currently $2.2 billion, according to Forbes.
In the wake of the Silicon Valley Bank and Signature Bank failures, many economists have revised their rate hike forecasts. For example, Goldman Sachs, a global investment bank, no longer expects the Fed to raise rates in March.
On whether the Federal Reserve will raise rates at the next Federal Open Market Committee (FOMC) meeting next week, Gundlach said:” I just think at this point the Fed will not go 50 (bp). I would say 25.” He elaborated.
They will probably raise rates by 25 basis points to protect this program and credit. I think that will be the last hike.
Noting that the Silicon Valley Bank case “is a big part of (Fed Chairman) Jay Powell’s game plan,” the executive emphasized, “I don’t think that’s a good thing. ‘I myself would not do that. But what happens in these messages that have occurred over the past six months, and what we thought we had resolved, happens.
On
, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) revealed plans to assist depositors of the failed Silicon Valley Bank and Signature Bank. The Treasury will raise up to $25 billion from the Exchange Stabilization Fund to cover the expected losses from this funding program. The Federal Reserve also announced that it will provide loans for up to one year to companies affected by bank failures.
While anticipating a March rate hike, Gundlach acknowledged the possibility that the Fed may not raise rates, noting that the market is currently evaluating this possibility as “a kind of coin flip.”
Gundlach also reiterated his warning about a future recession, citing the sharp steepening of the Treasury yield curve typically seen before recessions. In past recessions, decades ago, the yield curve began inverting months before a recession,” noted the billionaire.
I am a member of the Federal Reserve… I believe that inflationary policies are being reinstated by putting money into the cyst.