Will the Fed really raise interest rates?

Investment guru Jeffrey Gundlach thinks the December American interest-rate rise is anything but a done deal.

Jeffrey Gundlach often disagrees with the consensus and is often proved right.For the past two years the co-founder of DoubleLine Capital, which has $80bn in assets under management, has stood almost alone in his bullish view on US government bonds, while most analysts have expected higher yields (reflecting falling prices). Having prevailed in that stand-off, he now says the December American interest-rate rise by the Federal Reserve is hardly the done deal the market thinks it is.

Why? For the same reason he's been bullish on bonds: he thinks deflationary forces around the world have been underestimated. There are signs of distress in both the leveraged-loan and high-yield bond markets, and commodities are at a 13-year low. "The markets are falling apart", implying a deteriorating global economy hardly the sort of environment in which dearer US money makes much sense.

Recommended

James Anderson: innovation is still the key to returns
Investment strategy

James Anderson: innovation is still the key to returns

James Anderson, the man behind the Scottish Mortgage investment trust, tells Merryn Somerset Webb what he’d buy now
13 May 2022
A simple investment lesson from Warren Buffett that even children can learn
Investment strategy

A simple investment lesson from Warren Buffett that even children can learn

Warren Buffett has an incredible investment record. And at the core of his strategy there is one very simple principle. Rupert Hargreaves explains wha…
6 May 2022
Here’s why markets welcomed America’s big interest rate rise
Stockmarkets

Here’s why markets welcomed America’s big interest rate rise

The US Federal Reserve raised interest rates by half a percentage point – the biggest hike in 20 years. So why did markets rise? John Stepek explains …
5 May 2022
James Anderson: the trouble with the fund management industry
Funds

James Anderson: the trouble with the fund management industry

Merryn talks to Baillie Gifford's James Anderson about his career at Scottish Mortgage; the roles and responsibilities of the wider fund management in…
22 Apr 2022

Most Popular

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Aviva: a share for income investors to tuck away
Share tips

Aviva: a share for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
18 May 2022
Inflation is now at its highest since 1982 – is this the peak?
Inflation

Inflation is now at its highest since 1982 – is this the peak?

At 9%, UK inflation is at its highest for 40 years – and it’s not going anywhere soon, says John Stepek. That means you need to be much more active a…
18 May 2022