Jeffrey Gundlach, CEO of DoubleLine Capital, said on Wednesday that he now sees no more than one rate cut this year, as the Federal Reserve maintains its tight policy to fight stubborn inflation. “It is clear that it is the inflation rate that lacks progress, as (Jerome Powell) said, so I will rely on one rate cut,” Gundlach said on CNBC’s “The Closing Bell” program. “I don't think it will come in June.” The popular fixed-income investor, whose firm managed more than $95 billion at the end of 2023, said the most important moment from the Fed's policy event on Wednesday was when central bank Chairman Jerome Powell ruled out the possibility of raising interest rates. “It looks like the rally is going to last longer… the slogan seems to be continuing, but without a rate hike. So it's a very good environment,” Gundlach said. Treasury yields fell to session lows and stocks rose to session highs as Powell said the next policy move would not be a rate hike. “I think it's unlikely that the next rate move will be a rate hike. I would say it's unlikely,” Powell said during the press conference that followed the decision. Gundlach, often called the “King of Bonds,” said there are many attractive opportunities in the fixed income market for investors looking for yield, such as A- and BBB-rated corporate bonds. “You can get returns in the mid-seven without a lot of risk. This seems like it would be a very comfortable place to invest without a lot of volatility. So you want to take advantage of this inverted curve, which has been inverted for a very long time,” Gundlach said, referring to To conditions where short-term interest rates are higher than long-term returns, the widely followed investor explained that he only likes “assets with modest risks,” and in particular has taken a neutral stance on stocks.
