Jeffrey Gundlach on Kevin Warsh and a New Era at the Fed | CNBC

DoubleLine CEO-CIO Jeffrey Gundlach joins CNBC’s Scott Wapner following Federal Reserve Chairman Kevin Warsh’s debut FOMC press conference, calling it the start of a new era. Mr. Gundlach’s key takeaways: Chairman Warsh repeated “We will deliver price stability” more than anything else, and his decision to buy time through five task forces rather than move rates suggests no action until at least the fall. Mr. Gundlach greets the inflation framework task force with some skepticism, noting it could open the door to measurement techniques that conveniently engineer a path to declaring price stability. On the dot plot, with nine members projecting a rate hike this year, he sees it primarily as jawboning – but effective jawboning. He also raises the possibility that Chairman Warsh might prove more Volcker-like in his independence from the two-year U.S. Treasury, rather than slavishly following it as his predecessors have done for two decades.

On markets, Mr. Gundlach sees the hawkish tone as net positive for long-term Treasuries, arguing that a credible commitment to price stability actually provides better support for the long bond than the overeasing that had been driving yields higher. He remains cautious on U.S. equities – now approaching 50% concentration in just 10 names – and sees the funding burden of the AI capex cycle as the back side of the earnings story that markets have been celebrating. He remains most constructive on non-U.S. markets, particularly emerging markets (EM) equities and local currency EM bonds, which have been the best-performing asset class for U.S. dollar-based investors year-to-date. He closes with a pointed quip on Fed independence – thanking the stars that President Donald Trump is not running the Fed.

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