Jeffrey Gundlach sees ‘recession pressure’ increase with inflation

Four Fed rate hikes are priced in, and Jamie Dimon wants more

He added that the central bank may only be able to boost the policy rate to just 1.5% before it inflicts economic pain. It’s currently near zero, with a number of forecasters — including Goldman Sachs Group Inc. — anticipating that hikes will eclipse the 2% mark.

Jeffrey Gundlach said “recessionary pressure is building” in the U.S. economy with persistent inflation prodding Federal Reserve Chairman Jerome Powell to move back easy-money policies. The Fed “seems pretty far behind the curve when you consider wage growth,” the billionaire cash administrator of the DoubleLine Total Return Bond Fund said Tuesday during a webcast. “We will be more on downturn watch than we have been.” Gundlach, 62, said he was on the right track to foresee high inflation, that it may have topped 7% in 2021 and that it could “peak out” in the first half of this current year.

Consumer sentiment has worsened and bond yields “are no longer sending a don’t worry, be happy signal,” he said. The market is starting to flash signs of a “weaker economy ahead,” he said, while stopping short of predicting that a recession is imminent.

Other takeaways from Gundlach’s remarks:

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