Billionaire investor Jeffrey Gundlach warned that the Federal Reserve should stop its interest-rate hikes, saying the inflation threat is vanishing.
“I think there has been some progress on inflation,” the DoubleLine Capital CEO said during a Wednesday CNBC interview. “Nobody’s really talking about all of these runaway price increases anymore. With the economy weakening, I think the inflation rate is going to fall faster than most economists do,” he added.
Gundlach’s comments come after the Fed delivered an interest-rate hike of 50 basis-points Wednesday as it continues trying to bring down inflation toward the 2% official target, from 7.1% in November. The central bank has increased its benchmark rate by 425 basis points this year to 4.25%-4.5%, the highest level since 2007.
The moves dashed any investor hope that the central bank will pivot from its aggressive policy amid growing recession risks. Gundlach pointed to an inverted yield curve in the bond market as a flashing sign of an oncoming economic downturn.
