FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital LP, Presents at the 2019 Sohn Investment Conference in New York City, USA, May 6, 201
(Reuters) – Federal Reserve has lost Jeffrey Gundlach, chief executive of DoubleLine Capital, said controlling interest rates is clear from federal fund rates that are higher than any portion of the US Treasury.
"What else do you need to call it an inversion?" Gundlach said in a telephone interview. “Everyone analyzes all these little arbitrary things. But we have an inversion. ”
At around 1.55% and 2.03%, the benchmark return on 10-year government bonds and 30-year government bonds under the federal target rate is 2.25% to 2.5%. The return on the two-year Treasury is currently around 1.51%.
Three weeks ago, Federal Reserve Chairman Jerome Powell characterized the US Federal Reserve's first interest rate cut since 2008 as a "mid-cycle adjustment of policy," suggesting that the move was not the start of a long series of interest rates.
Gundlach, which oversees more than $ 140 billion in assets, told Reuters last week that Powell's message to the markets has been inconsistent. He said Powell “cannot put together a coherent message against each other. It's different at every meeting – the mid-cycle adjustment won't hold up. "
Powell could use the Fed's Jackson Hole symposium on Friday to clarify his stance on whether the Fed is at the beginning of a rate-cutting cycle or only intends to cut a couple of times as insurance against a possible downturn.
Reporting by Jennifer Ablan; editing by Jonathan Oatis and Sonya Hepinstall