Gundlach says it’s ‘just not possible’ for the Fed to cut rates

Investors won’t see a rate cut out of the next Federal Reserve policy meeting, according to DoubleLine Capital LP chief executive officer Jeffrey Gundlach.

“People were looking for two rate cuts this year, but the inflation market has simply not cooperated,” Gundlach said on Fox News’ Sunday Morning Futures. “It’s just not possible, in my view, to cut interest rates when the two-year Treasury is almost 50 basis points higher than the Fed funds rate.”

Newly confirmed as Federal Reserve chair, Kevin Warsh is coming into the role at a “rough time,” Gundlach said.

With the Iran war sending oil prices surging, which bleeds into US inflation reports, he predicted that the upward trend will continue after the consumer price index jumped 3.8% in April, the fastest pace since May 2023. 

DoubleLine’s models suggest that “the next print on the headline CPI is going to start with a four,” Gundlach said.

The stock market has been “remarkably strong” through the turmoil. “When the Fed isn’t doing anything about the inflation problem, the stock market goes on a tear,” he said.

While Gundlach has been “very, very bullish on commodities now for about three years,” investors have had few altern...