The Federal Reserve's cautious stance on raising interest rates could backf...
FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital LP, presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermid /File Photo
“This U-Turn - on nothing fundamentally changing - is unprecedented,” Gundlach said in a telephone interview. “Three months ago, we were on ‘autopilot’ with the balance sheet - and now the bond market is priced for a rate cut this year. The reversal in their stance is stunning.” Gundlach, who oversees more than $123 billion in assets and is known on Wall Street as the “Bond King,” said he feels the Fed’s massive shift in such a short period on quantitative tightening could hurt the U.S. central bank’s credibility.
Gundlach, who correctly predicted the S&P 500 would post negative returns in 2018, said the benchmark index is set for another negative year. He said the stock market, for now, “likes the fact that they aren’t going to give them any problems.”
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