Who is Jeffrey Gundlach?
Jeffrey Gundlach is the CEO of DoubleLine Capital, founded in 2009. Gundlach is well known in the fixed income space with Barron’s having named him the “King of Bonds.”
Gundlach has been fairly critical of the Fed back in May stating that they were behind the curve in raising rates.
Gundlach on Powell’s Most Recent Speech
Powell’s speech on Wednesday was mildly confusing. In the first half of the speech, the market actually began to rally into the green. Soon after, Powell actually began to contradict himself on a few statements. This caused some confusion and back peddling in the market. This is a lesson I try to teach all of my clients, if there is one thing the market cannot stand it is uncertainty and confusion.
Our economy can work in most environments, all it needs is clear direction to move forward.
What brought me some confidence was Gundlach’s comments on the speech. Despite, the market ending in the red Wednesday, Gundlach seemingly felt that the Fed will do what they should and begin slowing rate hikes.
Gundlach’s Rationale
Gundlach’s comments actually touch on many of the same elements we have been telling our clients. Over the next year, we anticipate a reduction in inflation. Just like Gundlach, we have been monitoring commodity prices, and they are dramatically lower than their May highs.
Gundlach is predicting that we may be below 4.5% inflation by the May reading in 2023. Of course this assumes commodity prices and other factors remain constant.
In my opinion, whether it hits exactly below 4.5% is not as important as simply making sure that inflation is going down. Of which I do believe Gundlach’s thesis makes sense.
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*IntelliVest Wealth Management is a Registered Investment Advisor Headquartered in Spartanburg South Carolina.
