Coming soon, a recession and Fed rate cuts, says DoubleLine Capital's chief executive and chief investment officer Jeffrey Gundlach.
That was money manager Jeffrey Gundlach in a series of tweets early Friday, following the Federal Reserve’s ninth-straight interest rate hike since March 2022, though his cautionary tone sparked a rally for stocks as investors expect the central bank will have to start cutting rates, perhaps by the summer.
But he zeroed in on what he called “red alert recession signals,” pointing out that the yield on the 10-year Treasury yield TMUBMUSD10Y versus the 2-year Treasury yield TMUBMUSD02Y is now inverted by 40 basis points, from 107 basis points a few weeks ago. “All UST Yields two years and out are well below the Fed Funds rate,” he said.
“Seems obvious the US Treasury Yield Curve will not stay how it is now for long. Curve was deeply inverted, curve is rapidly de -inverting. Saw a financial media TV crawler today that called the Fed ‘defiant,'” he said.
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