Billionaire “Bond King” Jeffrey Gundlach Predicts Fed Rise Next Week – “It Will Be the Last Time” – The Economics Bitcoin News

Billionaire Jeffrey Gundlach, aka “The Bond King,” expects the Fed to rise at next week’s March meeting, which “will be the last,” he said. In addition, Gundlach warned: “Inflation policy is at work at the Fed again.”

Doubleline CEO Jeffrey Gundlach on Fed rate hikes

Jeffrey Gundlach, CEO and chief investment officer of investment management firm Doubleline, shared his expectations for a rate hike by the Federal Reserve in an interview with CNBC on Monday. Gundlach was nicknamed “The Bond King” after he appeared on the cover of Barron’s in 2011 as the “New Bond King.” His net worth is currently $2.2 billion, according to Forbes.

Many economists revised their upside forecasts following the collapse of Silicon Valley Bank and Signature Bank. For example, global investment bank Goldman Sachs no longer expects the Fed to rise in March.

On whether the Fed will move higher at next week’s FOMC meeting, Gundlach said: “I just don’t think the Fed will raise rates 50% at this point. [basis points]. I would say 25. ’ He elaborated:

In an effort to somewhat salvage the program and its credibility, they may raise rates by 25 basis points. I think that will be the last addition.

Notes Silicon Valley Bank fallout ‘really messing things up’ [Fed Chair] Jay Powell’s game plan,” the executive stressed, “I wouldn’t do it myself. But, in the context of all this messaging that’s happened over the past six months, what did you do, and then something happened that you thought you’d figured out. “

On Sunday, the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) revealed a plan to support depositors at failed Silicon Valley Bank and Signature Bank. The Treasury will provide up to $25 billion from its Exchange Stabilization Fund to cover any losses the financing program may incur. The Fed also announced that it would extend loans for up to a year to entities affected by bank failures.

While projecting a March rally, Gundlach acknowledged that the Fed may not go up, noting that the market is currently pricing in that possibility as “a sort of coin toss.”

Gundlach also reiterated his warning of an impending recession, citing the sharp steepening of the U.S. Treasury yield curve that typically precedes a recession. The billionaire noted that “in all the recessions of the past few decades, the yield curve started to invert months before the recession hit”:

I think the inflationary policy is working with the Fed again … pumping money into the system through this lending program.

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