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DoubleLine's Gundlach: A Fed rate cut could increase recession risks

2019-06-20 10:35

Jeffrey Gundlach, Wall Street's bond king and Founder and Chief Executive Officer of DoubleLine, expresses his afterthoughts on the dovish FOMC decision and its implications on the US economy.



Key Headlines:




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.



If the economy goes into recession and he (Trump) can't pull out by removing the tariffs, there's very little for him to run on.



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