Gundlach: There Is A Remarkable Divergence Of Views At The Fed
After the latest FOMC meeting, bond fund manager Jeffrey Gundlach was interviewed on CNBC
Jeffrey Gundlach delivered multiple notable soundbites in a recent CNBC interview. He noted that the Fed delivered a “risk-management” 25 bp cut, with Powell emphasizing that there is “no risk-free path”. The wide dispersion of views at the FOMC was probably the biggest takeaway from the latest dot-plots:
One FOMC member wants to see 125bps of rate cuts between now and year end, while another FOMC member sees a 25bps rate hike!
Meanwhile, the consensus is clearly for one 25bps rate cut at each of the last two FOMC meetings of 2025.
At the 2:20 mark, Gundlach flagged the large downward revisions to payrolls and issues with the birth–death model; he says the Fed should focus more on the unemployment rate (≈4.3%) and warns of over-easing risk.
Other highlights from the Gundlach interview:
(03:53–04:22) On recession watch: unemployment vs. its 36-month moving average and the 2s/10s curve crossing above its 12-month moving average both suggest we’re near the front edge of recession risk.
(05:41–06:26) Long bond doesn’t want aggressive easing and dislikes rising deficits; Gundlach says government spending is “out of control,” helping explain why long yields backed up after the cut.
30-Year U.S. Treasury Yield
(08:12–08:33) Credit looks expensive; if Treasuries rally further, insurers/annuity buyers may miss yield bogeys, implying pressure for wider credit spreads.
(09:32–10:16) Strong anti-dollar view: foreign inflows to U.S. assets have reversed; he favors non-U.S. exposure as dollar weakness boosts FX-translated returns.
Gold (Daily)
(10:51–12:36) Gold: momentum remains powerful; he still expects >$4,000/oz before year-end and sees year-end CPI with a “3-handle” (~3.0–3.3%), keeping inflation risks alive.
(13:15–14:01; 15:40) Rates stance: avoid the 30-year, keep duration in 2-year/intermediates; expects continued curve steepening unless policymakers step in (possible yield-curve control).
(17:14–22:16) Portfolio sketch: ~25% gold as “insurance”; ~40% equities mostly non-U.S. (Europe, some Asia ex-China); ~10% local-currency EM debt; underweight U.S. stocks, avoid China due to policy/capital-flow risks.
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