Jeffrey Gundlach on “Well-Positioned” Fed | CNBC

DoubleLine CEO-CIO Jeffrey Gundlach joins Scott Wapner on CNBC’s “Closing Bell” after Federal Reserve Chair Jerome H. Powell’s FOMC press conference to break down what Mr. Gundlach views as a surprisingly dovish message from the Fed. He emphasizes Chair Powell’s repeated claim that the Fed is “well positioned,” along with the Fed chief’s notable suggestion that payroll gains might be overstated – both stances signaling the Fed potentially being more concerned about weakening employment than inflation. Mr. Gundlach also highlights that after the latest cut, the federal funds rate is finally aligned with the two-year Treasury yield, reinforcing his longstanding view that the Fed ultimately follows the front end of the Treasury yield curve.

In terms of key themes shaping allocation decisions, he points to a steepening yield curve, stable credit markets and strong performance in non-U.S. and emerging markets (EM) assets. Mr. Gundlach warns that elevated U.S. equity valuations resemble prior speculative periods, and he argues that future Fed leadership is likely to be more dovish, with additional rate cuts posing downside risk to the U.S. dollar. Against this backdrop, Mr. Gundlach continues to favor intermediate Treasuries, commodities, gold and local currency EM debt as strategic portfolio diversifiers.