Jeffrey Gundlach is the founder, and CEO, of DoubleLine Capital
Response to the FOMC:
- bond market has been saying that the Fed's policy is too tight by a very large amount for the past several weeks, if not few months, and the Fed simply cannot ignore that
- a lot of people think if the Fed eases it'll be an insurance policy against recession
- But if past patterns are prologue, if we actually start steepening out the yield curve from an inversion three months to 10 years, that's actually highly coincidental with the coming recession
- Fed message today was essentially: the case for easing has strengthened, we hope that changes soon, if it doesn't we're behind the curve
At a guess if G says the Fed is behind the curve then after one cut he'd be expecting there will be more to follow in quick succession.
