Bond King Jeffrey Gundlach Expects Fed to Raise Rates

Bond King Jeffrey Gundlach Expects Fed to Raise Rates

Banking Finance Mix
August 3, 2022 by Admin
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What impact will the Fed increasing interest rates have? Billionaire investor Jeffrey Gundlach is predicting that the Federal Reserve will raise interest rates next week with a quarter-point hike. Gundlach stated he believes the increase will be the last one for this cycle, as the Fed is “at the end of its rope.” Gundlach’s Prediction
783 billionaire bond king jeffrey gundlach expects fed to raise rates next week that would be the last increase

What impact will the Fed increasing interest rates have?

Billionaire investor Jeffrey Gundlach is predicting that the Federal Reserve will raise interest rates next week with a quarter-point hike. Gundlach stated he believes the increase will be the last one for this cycle, as the Fed is “at the end of its rope.”

Gundlach’s Prediction Comes Amid Increasing Optimism

Gundlach’s prediction has come in the midst of increasing optimism in the economy. Recent data has shown that U.S. job growth has remained strong, and the unemployment rate continues to decline, hovering near an 18-year low. The current strength of the economy has caused some to speculate that the Fed may move to raise interest rates three more times in 2018.

However, Gundlach Is Not Convinced

Gundlach, however, is not convinced. The billionaire investor, also known as “The Bond King”, disagrees with those who believe that the economy is strong enough to support further increases in interest rates. During a CNBC interview, Gundlach stated that he believes the Fed is “overestimating the strength of the economy.” He also pointed to the flattening yield curve, which suggests that the economy could soon enter a recession, as evidence that further rate hikes should be avoided.

Gundlach Is Still Optimistic About Bonds

Gundlach’s opinions on rate hikes are in stark contrast to his views on bonds. Despite his belief that the Fed will soon stop raising interest rates, the renowned investor is still positive about the bond market. He believes that there are still good opportunities to be found in the bond market, due to its high liquidity and low volatility.

Conclusion

Despite increasing optimism in the economy, billionaire investor Jeffrey Gundlach is predicting that the Federal Reserve will raise interest rates next week — and that it will be the last increase. Gundlach believes the Fed is overestimating the strength of the economy and has pointed to the flattening yield curve as evidence that further rate increases may be unwise. Nevertheless, Gundlach is still optimistic about the bond market and believes there is still an opportunity to be found there.