DoubleLine founder Jeff Gundlach says the Federal Reserve should have raised interest rates by more than just a quarter of a point on Wednesday.
“I would have said it was over,” Gundlach said Wednesday on CNBC’s “Closing Bell.” This is a play on the phrase “one and done” to refer to the view by some that the Fed could get away with just one or two rate hikes instead of embarking on a tightening cycle.
Gundlach, one of the most prominent bond investors, said a half-point rate hike would bring the market “in line” with the federal funds rate.
of 2 years treasury Gundlach said the interest rate was more than 100 basis points above the federal funds rate. The two-year Treasury yield, which is tied to the Federal Reserve’s short-term interest rate expectations, rose about 7 basis points in afternoon trading Wednesday.
Gundlach said he was concerned that the inflation problem facing the United States was not being “fully respected.”
“I was only going to run it 50 times and see what the data would be like,” Gundlach said.
2 years Treasury, 1 day
Indeed, Gundlach said he was advocating for a larger rate hike than the Fed has done in the past. He said two-year Treasuries were “leading” the Fed, a hypothesis that was proven correct Wednesday, the investor said.
Gundlach said at a news conference after Federal Reserve Chairman Kevin Warsh’s decision that he was not surprised by the decline in stock prices. of Dow Jones Industrial Average It fell 700 points in late afternoon trading, with losses accelerating during and after Warsh’s rally.
“I thought it was pretty thin,” Gundlach said of Warsh’s press conference, adding afterward that the central bank chief “was opaque.”
Mr. Gundlach also said he disagreed with Mr. Warsh’s push to convene a special committee to assess several important aspects of the Fed’s operations.
“It’s like a company with a problem that wants to hire a consultant,” Gundlach said. “Consultants always want to understand what people in the company really want to hear. Then they tell them what they want to hear.”
