‘Bond King’ Jeffrey Gundlach says interest rates have bottomed for the year

Finance

Jeffrey Gundlach speaking at the 2019 SOHN Conference in New York on May 6th, 2019.

Adam Jeffery | CNBC

DoubleLine CEO Jeffrey Gundlach believes the bottom for interest rates is in for 2019.

Growing fears about a possible global economic slowdown prompted Treasury yields to hit their historic lows a few weeks ago. The so-called bond king said yields won’t go any lower this year.

“It’s not a great idea to bet on low interest rates,” Gundlach said in an investor webcast on Tuesday. When asked if he would buy 10-year Treasury now, Gundlach said “absolutely not.”

The yield on the benchmark 10-year Treasury breached below 1.5% in August, while the 30-year Treasury bond yield fell below 2% for the first time ever as the U.S.-China trade war escalated.

The Federal Reserve conducted a repurchase operation Tuesday involving $53 billion worth of various debt instruments as it seeks to control the level of its benchmark interest rate. Gundlach said the central bank will see the “repo” move as a “warning sign” and will resume expansion of its balance sheet.

“The freeze-up can only be viewed as a negative,” Gundlach said. “They are baby-stepping their way to doing QE.”

The Federal Open Market Committee will announce their decision on interest rates on Wednesday. Gundlach said he expects the Fed to cut rates by a quarter point.

Gundlach, a respected markets forecaster, oversees $130 billion of assets under management at DoubleLine, according to its website.

Articles You May Like

Consumers may soon get access to a share of $8.8 billion in Inflation Reduction Act home energy rebates
Here’s why it could be better to buy Series I bonds before May, experts say
Global police agencies take down massive scam website that defrauded thousands of victims
Lululemon to shutter Washington distribution center, lay off 128 employees after tripling warehouse footprint
39 Personal Finance Lessons In Honor Of My 39th Birthday

Leave a Reply

Your email address will not be published. Required fields are marked *