DoubleLine CEO Jeffrey Gundlach, and Capital Wealth Planning CIO Kevin Simpson, join host Melissa Francis, former CNBC, MSNBC, Fox Business, and FOX News anchor, to break down standout trends in the bond markets. Featuring special guest Gary Kaminsky, former vice chairman at Morgan Stanley and former capital markets editor at CNBC.
Watch the full interview and see more bond market breakdowns on Magnifi by TIFIN.
Welcome, everyone. Today we're here to talk about Magnifi by TIFIN, a marketplace where you can harness real-time proprietary data to help individual investors and financial advisors find, compare and buy investment products like stocks and ETFs and mutual funds and model portfolios to grow and preserve your wealth.
I'm Melissa Francis. I know a little bit about this subject matter. I am former CNBC, MSNBC, Fox Business and Fox News anchor. And joining us today is investor, legend and founder of DoubleLine Jeffrey Gundlach. Welcome. Thank you so much for joining us. I know on a day when we are watching markets tank, everyone wants to talk to you and get your perspective. I'm lucky enough to have you here and I'm just going to let you go. What's your take on what's happening today?
Well, I think we need to start admitting that we're running into a stagflation situation. The Fed is in a really difficult position because these price spikes are really going to need the Fed to be aggressive if they're serious at all about fighting inflation. And we're starting at such a low rate level relative to an inflation rate that's already seven and a half percent. We have about a 1.7% 10-year treasury. We have Jimmy Carter type of negative interest rates. They're even more negative than Jimmy Carter.
Continue reading "Bond Market Breakdown with Jeff Gundlach"
Janet Yellen’s equivocal remarks at last week’s semi-annual Congressional testimony certainly might make you believe that a rate hike at the Federal Reserve’s July 25-26 meeting is hardly a sure thing. Indeed, the odds of that happening are a lot less than 50-50. A lot less.
In her testimony, Yellen remained confident in her previous declarations that inflation would gradually rise to the Fed’s 2% target. “It’s premature to reach the judgment that we’re not on the path to 2% inflation over the next couple of years,” she said. But then she quickly hedged her bets. “We’re watching this very closely and stand ready to adjust our policy if it appears that the inflation undershoot will be persistent,” she said.
Based on the past several months’ worth of inflation statistics, one would have a tough time arguing that lower-than-expected inflation hasn’t become “persistent.” Last month’s consumer price index was unchanged from May and up only 1.6% versus a year earlier, the fourth straight decline by that measurement. That followed May’s personal-consumption expenditures index, the Fed’s preferred inflation measure, which fell 0.1%. The core index, which excludes food and energy, rose 0.1%, but just 1.4% on a year-to-year basis, well below the Fed’s target rate and lower than at the beginning of the year. Continue reading "Has Yellen Become A Dove Again?"
The bond market may have stopped listening to the Federal Reserve, but that doesn't mean we shouldn't know what the voting members of its monetary policy committee are thinking. What's clear is that they're not as united as they were at their last meeting just two weeks ago, when they voted nearly unanimously to raise interest rates by 25 basis points, with only Minneapolis Fed President Neel Kashkari voting against.
Now, no sooner was the vote cast, but it appears that it at least one member, maybe two, have misgivings about voting for the increase. At the very least, they're not as much in a hurry to raise rates again soon, if not until the end of this year, if not even later.
Still, as you would expect – or hope for – in a body of intelligent people, there's a strong difference of opinion on what the Fed should do next as it concerns interest rates. Continue reading "Should We Believe The 'Transitory' Story?"
Pretty much ever since Donald Trump threw his hat into the ring to run for president about 18 months ago, he’s been blamed for any number of things that have upset some people, no matter how preposterous.
He’s been blamed for recruiting Muslim fanatics to fight for ISIS. He’s been blamed for inciting violence at his own rallies, plus the riots that have followed his election. A middle school teacher in Berkeley, California - where else? - Blamed Trump after she had said she received an anonymous threat from neo-Nazis. I suppose if I spent enough time researching it I could find someone blaming Trump for killing Lincoln and Kennedy, the two World Wars and global warming - you just know he must have had something to do with that!
Now, since his stunning upset victory in the U.S. presidential election, bond yields have spiked to their highest levels since last January, and many people are putting the blame on him for that. Continue reading "Is The Spike In Bond Yields Trump's Fault?"
If you listen to some market observers, the record low yields in the Treasury bond market are warning us that the American economy is on the verge of falling into the same deflationary abyss of the euro zone and Japan. Like the Chicken Little story, if bond yields are falling, the sky must be falling, too.
With the yield on the 30-year T-bond hitting its lowest level ever last week, even lower than during the global financial crisis, they’re worried that if the Federal Reserve raises interest rates soon, we’ll shortly be back to the bad old days of 2008 and, even worse, 1929.
No less a figure than Paul Krugman, the New York Times’ economics commentator, wrote that the Swiss Central Bank’s move last week to decouple the franc from the free-falling euro is a portent of what could happen to us if we let our deflationary guard down. Continue reading "Chicken Little and the Bond Market"