DoubleLine Capital CEO Jeffrey Gundlach expressed on Wednesday that he believes the Federal Reserve will not adjust interest rates for the remainder of Jerome Powell's tenure as chair. Gundlach conveyed his outlook on CNBC's 'Closing Bell,' stating, "I think I would bet pretty heavily that there's not another rate cut under Jay Powell." He noted Powell's focus on highlighting a slightly heightened inflation, though not as severe as previously feared, and the stabilization of unemployment rates.
Powell will preside over just two more policy meetings in March and April before the end of his term, at which point a new chair is expected to assume the role for the June meeting, pending Senate confirmation.
On Wednesday, the central bank decided to keep the overnight lending rate steady within a range of 3.5% to 3.75%. The statement following the meeting suggested that economic activity has been "expanding at a solid pace," while acknowledging signs of stabilization in the unemployment rate.
"I think, and many of my colleagues think, it's hard to look at the incoming data and say the policy is significantly restrictive at this time," Powell mentioned during his press conference.
The CME FedWatch Tool indicates that Fed funds futures trading predicts two quarter percentage point cuts by the end of 2026.
"He's talking about less tension between both sides of the mandate, and I really agree with that," Gundlach said, referring to the Fed's dual goals of price stability and maximum employment. "And I think he's setting the stage."
Gundlach also reiterated his advocacy for international market exposure, suggesting that investors allocate 30% to 40% of their portfolios to unhedged international equities, which could benefit from currency gains against the U.S. dollar.