Jeffrey Gundlach, founder and CEO of Wall Street investment fund Doubleline Capital (Gundlach, known as the “King of New Bonds”), mentioned in an interview on the 14th that he is worried that the Fed’s continued interest rate hikes will lead to a deflationary crisis, The current liquidity crunch is not a good time to buy cryptocurrencies. (Recap:Financial Times poll: Most economists don’t think the Fed will change monetary tightening until 2024) (background notes:Popular Science | What is the US dollar index? Are inflation, Fed rate hikes, and 20-year highs bad for cryptocurrencies?)
After Cathie Wood, CEO of Ark Investment, named him in the live webcast, Tesla CEO Elon Musk and Jeffrey Gundlach, CEO of Double Line Capital, known as the “New Debt King”, also generously spoke about their economic situation. According to the forecast, all three believe that if the United States does not slow down its interest rate hikes or even cut interest rates, the United States will fall into a deflationary dilemma.
In an interview with CNBC on the 14th, Jeffrey Gundlach talked about the Federal Reserve’s (Fed) drastic rate hike will increase the risk of deflation, bond investment markets, and talked about whether cryptocurrencies are a good choice as a safe-haven asset.
Further reading:Musk warns: The Fed will raise interest rates sharply and cause ‘deflation’! Peter Schiff: The Fed will bail out the market with massive QE
Gundlach, the king of new debt: I won’t buy cryptocurrencies now
Jeffrey Gundlach is the founder and CEO of Double Line Capital, with assets under management of more than $107 billion. Jeffrey Gundlach is naturally involved in cryptocurrencies. When asked if the current market conditions are a good time to buy cryptocurrencies, Gundlach believes that the Fed will not. Abandoning interest rate hikes, the market still sees downside, he said:
I definitely wouldn’t be a buyer today.
Gundlach emphasized that a good time to buy cryptocurrencies is when the Fed stops raising interest rates and starts to cut interest rates. When the Fed starts printing money and returns to quantitative easing (QE), cryptocurrency investors should not just buy for dreams, but need Monetary policy as a fulcrum:
I think when the US government starts “printing free money” before you can buy cryptocurrencies, you need a real Fed pivot.
Think U.S. stocks will fall another 20%, bullish on U.S. Treasuries
In the interview, Gundlach believes that the Fed will raise interest rates by 3 yards (75 basis points) next time, but he himself believes that 1 yards is enough, and over-directing the economy will lead to deflation risks. And Gundlach agrees with a forecast previously made by Scott Minerd, global chief investment officer at Guggenheim Investments, that U.S. stocks will fall 20 percent by October this year.
Gundlach, known as the “King of Bonds”, also cheered for investors. He said that the bond market is currently full of unprecedented opportunities. In addition to the possibility of deflation, it is a reliable plan to purchase long-term U.S. Treasury bonds; There’s a lot of interest in bonds, and the potential for capital gains to buy now is the best it’s been in the past 15 years.
Bridgewater’s Ray Dalio on inflation: The Fed’s big interest rate hike will have “two negative effects” on asset prices, and the market will fall by about 20%
Popular Science | What is the US dollar index? Are inflation, Fed rate hikes, and 20-year highs bad for cryptocurrencies?
Financial Times poll: Most economists don’t think the Fed will change monetary tightening until 2024