Jeffrey Gundlach says bond market signals Fed needs more than rhetoric to tackle inflation
Following the Federal Reserve's decision to keep interest rates unchanged at 3.5%–3.75%, DoubleLine Capital CEO Jeffrey Gundlach argued that achieving a 2% inflation target will require concrete action, not just verbal commitments from policymakers. Gundlach noted divergent movements in Treasury yields as evidence of market skepticism about the Fed's resolve. While two-year Treasury yields fell slightly, long-term bond yields rose sharply—indicating investor pressure for more decisive rate hikes to curb inflation. The 10-year yield climbed over 7 basis points and hit 4.681%, while the 30-year yield surged to a nearly 20-year high of 5.213%. Fed Chairman Kevin Warsh emphasized that necessary steps will be taken if required, but Gundlach warned it could take years to reach the inflation target and suggested further rate increases are likely.
Topics: Fed policy inflation target interest rates Treasury market