(Bloomberg) — DoubleLine Capital Chief Executive Officer Jeffrey Gundlach took Federal Reserve Chairman Jerome Powell to task for what he said were “contradictory” statements after the central bank raised rates by 75 basis points on Wednesday.
Gundlach, speaking in an interview on CNBC, said Powell’s comments earlier in the day showed the Fed chair had taken a short-term outlook and made a “complete U-turn on some of the things” said “six weeks ago and six months ago.”
The investment manager sees the target for the federal funds rate at around 2.5% to 2.75% by September.
Inflation is “so high” that for the Federal Open Market Committee’s objective to return inflation to 2% is “completely out of the cards if you look at the data,” Gundlach added.
US inflation hit a fresh 40-year high in May, with the consumer price index rising 8.6% from a year ago.
The DoubleLine model sees inflation possibly coming down to the high 6s by year end.
Gundlach argued that the Fed should bring rates to 3% now and then watch the data in order to give themselves the flexibility that they need.
Gundlach said he wasn’t bullish on Bitcoin at $20,000 or $21,000 and “wouldn’t be surprised if it went to $10,000.” He said he is bearish on the dollar in the long term but remains “kind of neutral on stocks.”
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