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Jeffrey Gundlach says interest rates have bottomed out for 2019



Jeffrey Gundlach spoke at the 2019 SOHN Conference in New York on May 6, 2019.

Adam Jeffery | CNBC

DoubleLine CEO Jeffrey Gundlach believes that the bottom for interest rates is in for 2019.

Growing fears of a possible global economic downturn led to government rates reaching historic lows a few weeks ago. The so-called bond king said the return will not go any lower this year.

"It's not a good idea to invest in low interest rates," Gundlach said in an investor webcast Tuesday. Asked if he would buy 1

0-year Treasury now, Gundlach said "absolutely not."

The return on the 10-year Treasury benchmark index fell below 1.5% in August, while the 30-year Treasury yield fell below 2% for the first time ever when the US-China trade war escalated.

The Federal Reserve conducted a repurchase operation on Tuesday involving $ 53 billion worth of various debt instruments as it attempts to control the level of the reference interest rate. Gundlach said the central bank would see the "repo" move as a "warning sign" and would continue to expand the balance sheet.

"The freezing can only be seen as a negative," Gundlach said. "They are making their way to QE."

The Federal Open Market Committee announces its decision on interest rates Wednesday. Gundlach said he expects the Fed to cut interest rates by a quarter.

Gundlach, a respected market businessman, oversees $ 130 billion of assets under management at DoubleLine, according to the website.


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