DoubleLine’s Gundlach says he’s ‘less confident’ in Fed delivering one rate cut in 2024

DoubleLine Capital CEO Jeffrey Gundlach on Wednesday flagged the potential for the Federal Reserve to finish 2024 without delivering a reduction in interest rates.

Fed Chairman Jerome Powell at its June policy press conference Wednesday said monetary policymakers want “greater confidence” that inflation is sustainably cooling before it begins its rate-easing cycle. May’s CPI report on Wednesday showed progress, with the annual core inflation at its lowest since 2021. However, inflation data “have not given us that greater confidence,” so far this year, Powell said.

Gundlach told CNBC that he’s “less confident” that there will be one rate cut this year. “I almost feel like the Fed is going into a reactionary mode. They’re going to react much more volatilely and quickly if the data starts to get bumpier,” the hedge fund boss said. Gundlach does expect inflation to move lower.

The Fed continuing to wrestle with inflationary pressures or with an event that impacts inflation could lead Powell to “possibly go to Fed-hike rhetoric,” in the future, Gundlach said.

In May, Gundlach said the Federal Reserve may decide to cut interest rates only once this year with inflation stalled above the central bank’s 2% target.

The S&P 500 (SP500) and the Nasdaq Composite (COMP:IND) closed Wednesday’s session at fresh record highs.