“I think they should not do any more hikes after today,” Gundlach said.
In Gundlach’s view, the Fed needs to be more transparent about its inflation target, saying he doesn’t think the central bank actually wants to drive it down to 2%.
“I secretly believe the Fed’s inflation target is more like 3% now. If we get down to 2%, I don’t see any way it’s going to stop there. It would just be so much momentum to the downside […] that I just don’t know if they really want to go that far,” he said.
“They just don’t always articulate the moving of the target because that makes them look weak, it makes them look indecisive,” he continued.
He also stated the Fed will be “highly encouraged” by positive inflation data over the next six months, and predicted the pace of price increases will fall to 4.1% by next June.
