Jeffrey Gundlach (aka Bond King) is a billionaire who shares his views on when it’s ok to invest in cryptocurrency. “You need a true Fed pivot,” he stressed. Gundlach also warned about the increasing risk of deflation, noting that it’s time to be bearish on the stock market.
Jeffrey Gundlach: Fed Rate Hikes and U.S. Economy. When is it Time to Buy Crypto?
Jeffrey Gundlach is the founder and chief executive at investment management company Doubleline. He shared his views on the U.S. stock, bond and economy markets and when it’s time to invest in crypto. Doubleline is headquartered in Tampa, Florida and has $107 billion (AUM).
The billionaire, speaking to CNBC at the Future Proof conference on Tuesday, explained that crypto is still too young to get on board as the Federal Reserve will likely raise interest rates.
Gundlach offered his opinion on whether the time is right to invest in cryptocurrency given current market conditions.
I’d certainly not be a buyer today.
Gundlach is sometimes known as the Bond King after he appeared on the cover of Barron’s in 2011 as “The New Bond King.” Institutional Investor named him “Money Manager of the Year” in 2013 and Bloomberg Markets ranked him one of “The Fifty Most Influential” in 2012, 2015, and 2016. Gundlach was inducted in 2017 into the FIASI Fixed-Income Hall of Fame. He has a net worth of approximately 2.2 billion.
In the Tuesday interview, the billionaire stressed that the time to return to the crypto space would be when the Federal Reserve pivots from rate hikes and begins its “free money” policies. Citing the Federal Reserve’s hawkish stance and recession fears, Gundlach emphasized:
I think you buy crypto when they do free money again … You need a true Fed pivot.
He added that investors should not buy crypto when there are only “dreams” of a monetary policy pivot.
Doubleline CEO John McMahon also warned of the growing risk of deflation. This was seen as the main threat to U.S. markets and the economy. He explained that it is time for investors to become more bearish on U.S. stocks, noting that the S&P 500 could fall 20% by mid-October.
“The action of the credit market is consistent with economic weakness and stock market trouble,” Gundlach described, elaborating:
You need to be more bearish.
While admitting that stock picking is not his forte, he said: “You always want to own stocks, but I’m a little on the lighter side.” Nonetheless, he sees emerging markets as the biggest upcoming opportunity for equity investors.
In light of the possibility of deflation, he recommended that investors purchase long-term U.S. bonds securities. “Buy long-term Treasurys,” he advised, emphasizing:
The deflation risk is much higher today than it’s been for the past two years.
Regarding the time frame, he clarified: “I’m not talking about next month. I’m talking about sometime later next year, certainly in 2023.”
Recently, Tesla CEO Elon Musk also warned that a major Fed rate hike could lead to deflation, echoing the statement by Ark Invest CEO Cathie Wood that “Leading inflation indicators like gold and copper are flagging the risk of deflation.”
How do you feel about Jeff Gundlach’s comments on crypto and deflation? Comment below to let us know your thoughts about Jeff Gundlach’s comments on deflation and when you should buy crypto.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis information is provided for educational purposes only. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com doesn’t offer investment, tax or legal advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.