Recession Odds Are ‘Pretty Darn High’ Right Now, Gundlach Says
(Bloomberg) -- DoubleLine Capital's Jeffrey Gundlach said there's an increased likelihood of a recession and the Federal Reserve likely won't lift interest rates again following its latest increase.
“Recessionary odds are pretty darn high right now,” Gundlach said in an interview on CNBC on Wednesday after the Fed's decision to boost its benchmark rate by a quarter-point and hint at a pause in its tightening cycle.
Gundlach, the asset manager's co-founder, cited the cumulative rate increases by the Fed since March 2022 and credit contraction for reasons he's “turning more bearish at this point in time.”
Bond traders briefly saw a slightly higher chance of a June rate hike on Wednesday, but are leaning toward a pause in rate increases as the most likely outcome. They're still anticipating rate cuts by year-end.
Gundlach also expressed worry about the stock market and said he suspects the S&P 500 Index will decline after being stuck in a trading range and struggling to surpass the 4200-4300 mark.
“My suspicion is we'll break to the down side,” he said.
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