Jeffrey Gundlach: no Fed rate cut next meeting

Jeffrey Gundlach said on May 17 that investors should not expect the Federal Reserve to cut interest rates at its next policy meeting, arguing that recent inflation data and bond-market pricing do not support an easing move. Bloomberg reported the comments after Gundlach, the DoubleLine Capital chief executive, appeared on Fox News’ “Sunday Morning Futures.” The next scheduled Federal Open Market Committee meeting is June 16-17, according to the Federal Reserve. April consumer-price data released May 12 showed inflation running above the Fed’s 2% target. ### What exactly did Gundlach say? Bloomberg reported on May 17 that Gundlach said investors “won’t see a rate cut” at the next Fed meeting. The report said he told Fox News that “it’s just not possible, in my view,” for the central bank to lower rates under current market conditions. The Bloomberg report said Gundlach pointed to the gap between short-dated Treasury yields and the federal funds rate. He said the two-year Treasury yield was almost 50 basis points higher than the Fed funds rate, arguing that the inflation backdrop had not eased enough to justify a cut. ### Why is inflation central to that argument? (bloomberg.com) The Bureau of Labor Statistics said on May 12 that the consumer price index rose 0.6% in April after a 0.9% increase in March. The all-items index increased 3.8% over the previous 12 months, up from 3.3% in March. The same BLS release said energy prices rose 3.8% in April and accounted for more than 40% of the monthly increase in the all-items index. (bloomberg.com) Core inflation, measured by all items less food and energy, rose 0.4% on the month and 2.8% from a year earlier. ### Which Fed meeting is he talking about? The Federal Reserve’s 2026 calendar lists the next FOMC meeting for June 16-17. (bls.gov) The Board’s meeting-calendar page says the committee holds eight regularly scheduled meetings each year and publishes a policy statement after each decision. The June meeting matters because it is the next scheduled chance for officials to change the target range for the federal funds rate. (bls.gov) Chair Jerome Powell typically holds a press conference after meetings that include a policy decision, and the Fed’s calendar page links statements and related materials for each meeting. ### Are markets fully aligned with Gundlach’s view? (federalreserve.gov) CME Group’s FedWatch tool said on May 18 that the next FOMC meeting was about 34 days away. The tool describes its figures as probabilities implied by 30-day federal funds futures prices. CME’s public page in the available view does not show a numeric probability without the interactive tool, so the market-implied odds cannot be pinned down here from the static text alone. (federalreserve.gov) What the page does establish is that traders are using fed funds futures to price the June decision, the same market signal Gundlach cited in arguing against a near-term cut. (cmegroup.com) ### Why were traders paying attention to his comments? Jeffrey Gundlach is closely watched in bond markets because DoubleLine is a major fixed-income investor, and his public comments often circulate quickly across trading desks. Bloomberg’s May 17 report was picked up in market coverage on May 18 as investors weighed whether hotter April inflation had pushed the Fed further from an easing move. (cmegroup.com) April’s inflation report and the June 16-17 FOMC meeting now form the next two fixed reference points for that debate. The Fed is scheduled to release its policy statement at the end of the June meeting, and Powell’s press conference will provide the next official readout from U.S. central bank officials. (federalreserve.gov) (finance.yahoo.com)