Fed Unlikely to Cut Interest Rates in June: Gundlach
July rate cut is "a pretty good possibility," and a cut by September is basically "a lock," according to the DoubleLine Capital CEO.
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:
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