David Einhorn of Greenlight Capital projects that the Federal Reserve will implement more interest rate cuts this year than the market currently anticipates, which bolsters his confidence in his gold investment strategy.
Following a stronger-than-expected January jobs report, expectations for rate cuts diminished slightly. However, traders are still pricing in over an 88% likelihood that the central bank will introduce two quarter-point cuts by the yearâs end, according to the CME FedWatch Tool.
Despite this sentiment, Einhorn argues that interpreting the latest jobs data as a reason against further cuts is a mistake. He anticipates there could be more cuts, particularly as he expects Kevin Warsh, President Donald Trump's nominee to succeed Jerome Powell as Fed chair, to convince the committee to act accordingly.
âIf we have 4% or 5% inflation, sure, then he won't be able to persuade people, but otherwise he's going to argue productivity,â Einhorn stated on CNBC's "Money Movers" program to Sara Eisen, highlighting that Warsh may push for cuts even if the economy seems robust.
He added, âI think by the time we get to the end of the year, it's going to be substantially more than two cuts.â
Einhornâs portfolio also includes gold, which experienced a dip at the end of last month following Trumpâs nomination of Warsh as Fed chair. This announcement alleviated some Wall Street concerns about Fed independence, leading to a temporary sell-off.
Since then, goldâa traditional hedge against inflationâhas rebounded, with futures rising over 17% this year. This follows a more than 60% increase in 2025 amid fears over central bank independence, geopolitical tensions, and unstable trade policies. Overall, since 2024, gold has surged by more than 120%.