Billionaire Jeffrey Gundlach Believes The Fed Will Soon Reduce Interest Rates Dramatically

Key Points:

• Billionaire Jeffrey Gundlach predicts that the Federal Reserve will dramatically lower interest rates in the near future.
• He noted that, after two years, all UST rates are much lower than the fund’s lending rate.

The Federal Reserve, according to billionaire “king of bonds” Jeffrey Gundlach, will decrease interest rates considerably shortly.

All U.S. Treasury rates from two years on are “well below the federal funds rate,” he added, citing “recession red flags.” The Federal Reserve, according to Jeffrey Gundlach, CEO and Chief Investment Officer of investment management firm Doubleline, will decrease interest rates shortly. In 2011, Gundlach was dubbed the “King of Bonds.” His current net worth is $2.2 billion.

Despite the financial crisis, the Federal Reserve boosted interest rates by 25 basis points (bps) this week. The Chairman Jerome Powell stated that he does not anticipate the central banking to lower interest rates this year. “From two years on, all UST yields are much lower than the fund’s lending rates,” the Doubleline CEO stressed. When short-term Treasury yields climb above long-term bond yields, the yield curve inverts.

According to Gundlach, the current rate rise will be the Federal Reserve’s last. The billionaire warned of terrible consequences in the next recession in February. Many people want the Fed to lower interest rates. Elon Musk, CEO of Tesla and Twitter, has stated that the Fed is “operating with too much lag in their data,” and that interest rates “need to drop immediately.”

Galaxy Digital CEO Mike Novogratz, like Gundlach, believes the central banking will lower rates “sooner than we think.” Meanwhile, with some forecasting a severe recession in the United States, eminent economist David Rosenberg warned last week of a “emergency landing” and recession.

Peter Schiff, an economist and gold specialist, made a prediction this week that inflation will grow so severe that the cost of living for Americans will not increase.

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