Gundlach says Fed rate has not peaked, CNBC reports
DoubleLine's chief executive says he sees virtually no chance the current level is as high as rates will go, according to CNBC.
Published
Chart: Fed target rate, top of the range
Jeffrey Gundlach, chief executive of DoubleLine, told CNBC he sees virtually no chance that the federal funds rate has already peaked.
The Federal Reserve raised its benchmark rate by 25 basis points to a range of 3.75% to 4% at its most recent meeting, with policymakers voting 12-0 in favour. Fed governor Kevin Warsh has said the economy has strengthened but that inflation remains the central problem, pointing to too many price categories still running above 3% and keeping the focus on price stability rather than the labour market.
Traders had raised bets on two more rate increases this year, beyond the Fed's own median projection of a single further move. Those bets have since pulled back, with markets now pricing about a 50% chance of a rate rise at the Fed's October meeting.
Gundlach's call for further increases beyond the current level runs against both the consensus among traders and the Fed's own median projection, which shows rates peaking near 4.1% by the end of 2026 before declining. With the central bank signalling a likely pause after its latest move, his view leaves little new information for traders to act on.