Bond investor Jeff Gundlach on Fed's rate pause: 'What are you waiting for?' — SkimNews
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- Jeff Gundlach questioned why the Federal Reserve was waiting to hike, citing Kevin Warsh’s upgraded view of the economy, a path toward 4% headline CPI and a commodity index rising in a bull market.
- Federal Reserve left rates unchanged at its October meeting after a 25-basis-point September hike; Gundlach said the September move should have been 50 basis points.
- 2-year Treasury note traded around 4.7%, above the Federal Reserve’s 3.75%-4% overnight rate, which Gundlach said was a sign the central bank was behind the curve.
- FedWatch put the odds of a 25-basis-point December hike at 85%; Gundlach said the Federal Reserve had to hike absent a crack in oil prices, which remained above $100 a barrel.
- Kevin Warsh said one meeting in 2027 and two in 2028 would focus on policy strategy without a fed-funds-rate vote; Gundlach said he preferred six rate-setting meetings starting immediately.
- Jeff Gundlach left his allocation unchanged at 30% equities, 30% bonds, 20% commodities and 20% dry powder, favoring the equal-weight S&P 500 to avoid potential AI “problems.”
Why it matters: Gundlach’s portfolio remains unchanged at 30% equities, 30% bonds, 20% commodities and 20% dry powder, so his call for tighter policy is not accompanied by a stated allocation shift. The concrete tension is the Federal Reserve’s 3.75%-4% overnight rate versus the 4.7% two-year Treasury yield, which he treats as evidence it is behind the curve.
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