DoubleLine Capital CEO Jeffrey Gundlach says the bond market is screaming that a recession is imminent.
DoubleLine Capital CEO Jeffrey Gundlach said the bond market is screaming that a recession is imminent, and he sees the Federal Reserve starting to lower interest rates in the near future. Gundlach points to the Treasury yield curve, which is rapidly becoming less inverted, and indicative of an economic downturn on the horizon. "UST 2 Year versus 10 Year is now inverted 40 basis points. Was 107 basis points just a few weeks ago.
The Fed on Wednesday took the benchmark fed funds rate a quarter percentage point higher to a range between 4.75%-5% , while signaling one more rate hike coming this year. Gundlach believes the central bank will reverse course soon. "I predict the Federal Reserve will be cutting rates substantially soon," he tweeted. But Gundlach's prediction contradicts what Fed Chairman Jerome Powell explicitly said Wednesday. "Participants don't see rate cuts this year.
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