Jeffrey Gundlach gives his latest insights into the Fed’s latest March meeting. 

“He (Fed Chair Powell) went out of his way to downplay January’s inflation expectations and didn’t even mention it,” said Jeffrey Gundlach.  

Jeffrey Gundlach noted that the market was worried that the dot plots would be 2 for the rest of the year and not three.

“So we have a steepening of the 2s and 10s yield curve. It is still inverted, but it is now down to 34 basis points,” he said.

“The stock market liked that he was not focusing on inflation data.  

We got a relief rally in the short end of the treasury market, and stocks, not surprisingly with the Fed ignoring the inflation data,” he added. 

The 30-year treasury bond dropped in price following the press conference. 

Jeffrey Gundlach thinks the yield curve could steepen, particularly if the CPI data doesn’t moderate.

“The stock market liked that he was not focusing on inflation data”


Jeffrey Gundlach gives his insight concerning the price of oil and inflation

He noticed oil prices have increased from 72 to 82 dollars since January. “Whenever there is a 10-dollar increase in West Texas immediate price you can expect the CPI to go up by about 40 basis points,” he said. 

Jeffrey Gundlach doesn’t see inflation below 3% during the first half of this year.

Jeffrey Gundlach gives his insight into everything rally in credit, with treasury bonds being the exception   

He noticed that the rally in corporate bonds started in November with the Fed pivot. 

Odds are for a June interest rate cut, given the present circumstances

“Fed is talking about a neutral rate of 3%, and their game plan is to inflate,” he said.     

“Fed is talking about a neutral rate of 3%, and their game plan is to inflate”


That explains capital flows from public to private assets that we see playing out. 

A corporate bond with a good credit rating, where its products and services are in demand, and profitability and pays higher yields than a treasury bond could be more attractive to investors than a government bond with poor fiscal oversight. 

Also, he sees yield compression when yields get downgraded from  BBB to BB, one of the lowest-ever ratings for investment-grade corporate bonds. 

Typically, when credit rating agencies downgrade bonds, the bond price falls, and yields rise to reflect the higher default risk.

“Risk appetite has been robust since the November pivot” – Jeffrey Gundlach

So, yield suppression could indicate the central bank buying bonds. 

In the corporate junk bond market, BB has the highest credit rating in junk bonds, while CCC’s lowest non-defaulted credit rating spread is high.

“That indicates that the market is pricing in higher for longer,” he said.  

The unemployment rate is above the one-year moving average. 

“We have been in a holding pattern for the past month, bond yields had the same rate of return,”  he added, “Risk appetite has been robust since the November pivot.”   

We are much more comfortable owning Indian and Japanese stocks than US stocks.

He is not interested in owning Magnificent 7 stocks. 

The higher they rise, the higher they fall.  “It feels like 1999. There’s a lot of trouble in the world,” he said.