Gundlach doesn't think anything will happen for Fed today
Bond guru Jeff Gundlach is on CNBC talking about the Federal Reserve and says today's Fed decision. He also emphasized a comment that I've been writing about since the day it was made.
"We've just touched 2% core inflation to pick one measure, & then we've fallen back. So I think we would need to see a really significant move up in inflation that's persistent before we would even consider raising rates to address inflation concerns."
Other comments:
- Applauds Powell for ruling out negative rates
- Notes that the bond market is in sync with bond markets
- Powell put us on a wild ride with hikes in 2018 and cuts in 2019 but we've essentially gone nowhere
- It's more like a phase 0.1 deal. It's just rhetoric to make it sound like they're doing something
- The 'phase one' idea is the low point of Trump's presidency, it was almost shameful
- The chance of a recession in 2020 is low
- Credit risk is very dangerous. Now is the time to be exiting the corporate bond market
- Corporate bond market has risen to $11T from $5T pre-crisis
- Based on leverage ratios alone, 39% of corporate credit should be rate junk
