'Bond King' Jeffrey Gundlach warns of jumbo rate hikes because the US economy is too hot
Billionaire investor Jeffrey Gundlach has warned its"very likely" the Federal Reserve will go for outsized interest-rate increases as the US economy remains too hot.
The so-called"Bond King" was responding to Fed Chair Jerome Powell's congressional testimony Tuesday where he signaled rates may rise"higher than previously anticipated" given recent strong economic reports. Data showing a tight US labor market and high consumer spending has fueled speculation the central bank will need to continue its policy tightening to bring inflation down.
"After Powell's testimony today, the chances of a 50-basis point increase have gone up a lot in the betting markets," Gundlach said Tuesday during a DoubleLine investor webcast,"We've had a very large increase in short-term interest rates and a further inversion of the yield curve. ... We don't need the Fed. All we need is the 2-year Treasury," he added, referring to a recent spike in short-dated Treasury debt rates.
According to Gundlach, the fed funds rate has tracked the 2-year Treasury yield over the years."It's now corroborating the idea that the Fed will probably take the fed funds rate up to 5% at the upcoming meeting," Gundlach said."The only way that won't happen is if the employment data and the unemployment rate ... surprises to the downside. That has not been the pattern recently," Gundlach said.
Investors are now keenly awaiting the next set of key economic data for fresh cues on the central bank's future policy steps - US jobs data for February is due on Friday, while the inflation print for last month will be published next week.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
DoubleLine’s Gundlach says the Fed is 'very likely' to hike rates by half point this monthJeffrey Gundlach said it's 'very likely' that the Federal Reserve will raise interest rates by half a percentage point at its next policy meeting.
Read more »
College Park ex-mayor jailed without bond for child porn chargesThe former mayor of College Park was denied bail Monday and will be held in jail as he faces 56 counts related to possession and distribution of child pornography.
Read more »
Street takeover suspect was out on bond in connection to hit-and-run death, records showA man charged with endangering his 4-year-old daughter during a parking lot 'takeover' last week has a history of traffic-related charges, including one that is tied to a hit-and-run death.
Read more »
James Bond's Most Successful Movie Damaged The Franchise For DecadesThe most successful James Bond movie cemented the franchise's success, but its legal issues would plague the saga in the decades ahead.
Read more »
Hailey Bieber Is 'Leaning on Justin' and 'Knows He Has Her Back' Amid Selena Gomez DramaA source says all this drama is only 'strengthening' Justin and Hailey's bond.
Read more »
Judge grants bond for Southern Poverty Law Center attorney charged in Atlanta 'Cop City' domestic terrorismSouthern Poverty Law Center employee and barred attorney Thomas Webb Jurgens, charged with domestic terrorism in the attack on Atlanta's 'Cop City,' was granted $5,000 bond Tuesday.
Read more »