Jeffrey Gundlach, the billionaire money manager and chief investment officer of DoubleLine Capital, said he doesn’t think the Federal Reserve will cut interest rates in June.

Here are additional comments he made during a webcast for his DoubleLine Total Return Bond Fund on the Fed’s next steps:

  • July rate cut is “a pretty good possibility,” and a cut by September is basically “a lock” — and maybe that one’s a 50-basis point reduction;
  • “Fed will try to say as little as possible” at next meeting;
  • Powell’s presentation will be lighting fast given the difficult position the Fed is in on rates;
  • “You only know with hindsight whether something’s an insurance cut,” says Gundlach.
  • You might get a 50-basis point cut in September;
  • Says “extremely probable” Fed will have to cut rates not just once but maybe up to four times;
  • Gundlach says the Fed will blame the tariffs for why they’re deviating from previously iterated outlooks;
  • “I can’t imagine what they’re going to do with the dots,” says Gundlach, adding that it would be odd if they put a cut in the dot plot and don’t immediately deliver one;
  • “Hard time believing” 2020 median dot will imply a hike;
  • On Fed Chair Jerome Powell’s balancing act: There’s a huge divergence between the last dot plot and what the bond market has been doing.

Here’s what the DOTS function shows:

Source: Bloomberg, 6/13/2019

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