Photo: Mario Tama / Getty Images
For: Real America News
Thursday, November 7
They warn about a possible phenomenon of recession in the US due to inflation
Jeffrey Gundlach, investor and founder of DoubleLine Capital LP, announced that “the recessive pressure is increasing” in the United States economy due to the inflation that drives the president of the Federal Reserve, Jerome Powell, to roll back economic aid policies.
The Fed “seems lagging behind when you look at wage growth,” Gundlach said during an internet broadcast, according to a report by Bloomberg. “We are going to be more attentive to the recession than we have been ”.
He added that it is possible that the central bank can only increase the policy rate to 1.5% before causing economic damage. The rate is currently near zero, and several experts, including Goldman Sachs, expect hikes to exceed the 2% mark.
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Gundlach added that he was right in predicting high inflation , which could have exceeded 7% in 2022 and that it could “peak” in the first half of this year.
Consumer confidence has worsened and bond yields “no longer send a don’t worry, be happy signal,” he said. The market is starting to show signs of a “weaker economy ahead
On other issues, Gundlach pointed out that the increase in Entry-level salaries could push up wages across the board, citing JPMorgan Chas CEO Jamie Dimon’s observation that there is great pressure in the US labor market.
Home prices are still “going up a lot” and mortgage financing can still seem cheap, he noted.
Gundlach expects European markets to perform better if the US market corrects. For value buyers, “the message is clear,” he said.
Earlier today, the US Bureau of Labor Statistics gave announced that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% in December after reaching 0.8% last November.
In addition, the report assured that the index of all articles rose 7% in the 12 months ending in December 2021, the largest increase since the period ending June 1982. The report shows that the greatest increases occurred in housing, used cars and trucks.
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