Jeffrey Gundlach speaks on May 6, 2019 at the 2019 son conference in New York.
Adam Jeffery | CNBC
Jeffrey Gundlach, CEO of Doubleline Capital, said on Wednesday that on Wednesday he was expecting only one rate for 2025 – at most two reductions – since the Federal Reserve is patient for incoming data to evaluate the stand of the labor market and inflation.
“A maximum of two cuts this year. And I mean maximum, I do not predict two cuts. I just think that this is the best thing you may think about,” said Gundlach about CNBC's “locking bell”. “If you let me select a number, I would now say that a cut would be the base case and a maximum of two.”
The central bank kept the interest rates on Wednesday after three consecutive cuts until the end of 2024. The chairman of Fed, Jerome Powell, emphasized that the central bank was not in a hurry to adapt its political stance, especially since the economy is still strong.
“It will be a slow process to reach a hurdle to reduce the tariffs again … … I don't think you will see a cut at the next Fed meeting,” said Gundlach. “He obviously focused on the stability of the unemployment rate so as not to lower the interest.”
The remarkable investor with a fixed income is of the opinion that the long state yields have more space to increase. He noticed that the benchmark 10-year rate has increased by around 85 basis points since the first year last year.
“I think the rates at the long end have not reached their peak,” he said. “I think the prices will have a step up at the long end.”
Gundlach warned of the possession of assets with high risk because he is high the long -term interest rates and his observation that the ratings are high.