DoubleLine Capital chief says the Fed needs to cut interest rates to properly address the regional banking crisis, and that future hikes are unlikely.
The regional bank crisis will persist unless the Federal Reserve cuts rates, according to Jeffrey Gundlach. The DoubleLine Capital co-founder and chief executive told CNBC's " Closing Bell " that despite comments from Fed chair Jerome Powell that the crisis has improved significantly, deposits will continue to flee. "These people are pulling money out because there's absolutely reason to keep it in," Gundlach said.
But Gundlach says Powell's comments Wednesday showed no sign that the Fed plans to cut rates in the near future and, as a result, recession odds have increased. The "storm clouds are much much denser than they were back in September, overall," Gundlach said. To truly bring an end to the banking crisis, Gundlach says, the Federal Reserve must cut interest rates.
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