IMPORTANT POINTS:
- The DoubleLine Capital chief executive took aim at the Federal Reserve, saying that until the rate hikes are finished, the stress will continue.
- He also clarified that people are taking money out of banks because “there is absolutely no reason to keep it.”
- In any case, Gundlach believes that the Fed will no longer raise interest rates for the remainder of the year.
The United States continues to grapple with a banking crisis, with many institutions facing bankruptcy in the coming months, alarming investors.
Against this challenging backdrop, DoubleLine Capital co-founder and CEO Jeffrey Gundlach commented on what he believes is the solution: for the Federal Reserve to stop raising interest rates.
The analyst took particular aim at Fed Chairman Jerome Powell, as he claimed that as long as rate hikes continue, deposits will continue to flee.
“These people are taking money because there is absolutely no reason to keep it. It just looks to me like deposits are going to continue to drift, I don’t think this is the last chapter in this regional banking problem…I really don’t see what will stop it unless the Federal Reserve cuts interest rates.”
Gundlach.
“Leaving the rates so high will continue with this stress. I think with a high degree of probability there will be more regional bank failures,” Gundlach added.
