From CNBC · Alex Harring · · 1m 10s
Gundlach: Fed should have hiked rates harder
The prominent bond investor says a half-point rate increase would have better addressed inflation concerns.
In brief
The prominent bond investor says a half-point rate increase would have better addressed inflation concerns. Jeff Gundlach believes the Federal Reserve's quarter-point rate hike was insufficient to combat rising inflation and that a larger increase would have been more appropriate. Originally reported by CNBC.
Gundlach wants bigger rate hike
Jeff Gundlach, founder of DoubleLine, says the Fed should have raised rates by half a percentage point instead of just a quarter point on Wednesday.
“I would have called that stun and done.”
Treasury rates signal Fed is behind
The 2-year Treasury yield sits more than 100 basis points above the Fed funds rate, suggesting markets expect higher rates ahead. Gundlach says the 2-year Treasury "leads" the Fed.
Inflation not being fully respected
Gundlach worries the U.S. inflation problem may not be getting the serious attention it deserves from policymakers.
“I worry that the inflation problem facing the U.S. may not be "fully respected."”
Warsh's press conference falls flat
Fed Chair Kevin Warsh's post-decision remarks were "pretty thin" and "opaque," according to Gundlach. The Dow fell 700 points during and after the conference.
“I thought the content was pretty thin.”
Task forces won't solve Fed problems
Gundlach criticized Warsh's plan to bring in task forces to evaluate Fed operations, comparing it to a struggling company hiring consultants to tell them what they want to hear.
“It's like a company that's having trouble that wants to hire consultants.”
The one thing
Jeff Gundlach believes the Federal Reserve's quarter-point rate hike was insufficient to combat rising inflation and that a larger increase would have been more appropriate.
