Billionaire Jeffrey Gundlach, aka Bond King, shared his view on when to buy the cryptocurrency. “You need a real Fed pivot,” he emphasized. Gundlach also warned of the increased risk of deflation, noting that it was time to take a bearish stance in the stock market.
Jeffrey Gundlach on Fed rate hikes, the US economy, and when to buy cryptocurrencies
Founder and CEO of investment management firm Doubleline Jeffrey Gundlach shared his look at the US economy, stock and bond markets, and when to buy cryptocurrencies this week. Headquartered in Tampa, Florida, Doubleline has more than $107 billion in assets under management (AUM) as of June 30.
In an interview with CNBC on the sidelines of the Future Proof Conference on Tuesday, the billionaire explained that it is too early to jump on the crypto bandwagon as the Federal Reserve is likely to raise interest rates further.
Commenting on whether it is a good time to buy cryptocurrency in the current market conditions, Gundlach said:
I definitely won’t be a buyer today.
Gundlach is sometimes known as the Bond King after he appeared on Barron’s cover in 2011 as “The New Bond King”. The institutional investor named him Money Manager of the Year in 2013, and Bloomberg Markets ranked him among the “50 Most Influential” in 2012, 2015 and 2016. He was inducted into the FIASI Fixed Income Hall of Fame in 2017. It is currently worth about 2.2 billion .
In an interview on Tuesday, the billionaire stressed that the time to return to the crypto space will be when the Federal Reserve turns away from price hikes and initiates “free money” policies. Citing the Fed’s hawkish stance and recession fears, Gundlach emphasized:
I guess you buy cryptocurrency when they earn free money again…you need a real Fed hub.
He added that investors should not buy cryptocurrencies when there are only “dreams” about the focus of monetary policy.
The CEO of Doubleline also warned of the increasing risks of deflation, considering it the main threat to the US economy and markets. He explained that it was time for investors to become more bearish on US stocks, noting that the S&P 500 could drop 20% by mid-October.
Gundlach described: “The actions of the credit market are in line with the economic weakness and the problems of the stock market,” explaining:
I think you have to start getting more bearish.
While acknowledging that stock picking is not his forte, he said, “You always want to own stocks, but I’m on the slightly lighter side.” However, he sees emerging markets as the next biggest opportunity for equity investors.
Citing the risks of deflation, he suggested that investors dive into long-term US debt securities. He advised “buying long-term Treasuries,” emphasizing:
The risk of deflation is much higher today than it was in the past two years.
Regarding the time frame, he clarified, “I’m not talking about next month. I’m talking about it later next year, definitely in 2023.”
Recently, Tesla CEO Elon Musk also warned That a large Fed rate hike could trigger deflation, echoing Ark Invest CEO Cathy Wood’s statement that “leading inflation indicators such as gold and copper point to deflation risks.”
What do you think of Jeff Gundlash’s comments on deflation and when to buy cryptocurrencies? Let us know in the comments section below.
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