Taps Coogan – December 15th, 2023

Jeffery Gundlach, the founder of DoubleLine Capital and the manager of one of the largest funds in the world, spoke with CNBC about his reaction to this weeks Fed meeting and his outlook for next year:

The wide-ranging interview doesn’t lend itself to excerpts but the punchlines are that Gundlach expects inflation to continuing dropping next year, is bullish on middle or longer duration bonds, still sees a recession as likely next year though thinks markets may not peak well into next year, and generally sees the Fed as likely to end up over-pivoting when then recession comes.

He also notes that Jerome Powell “seems to have gotten in sync with with the leads and lags a little bit better. I think he has learned some thing over the last three years, thankfully… He realizes that not all the tightening has gone through the system…”

Yours truly would agree with that sentiment about Powell. 2023 was a ‘good’ year for the Fed that saw them tighten policy more aggressively that I thought they could get away with. Beginning to forecast a few rate cuts also seems surprisingly instep for the 2024.