Billionaire Jeff Gundlach talks about the advisability of buying cryptocurrencies and also warns of the risk of deflation

Billionaire Jeffrey Gundlach, aka “king of bonds“, gave his opinion on when to buy cryptocurrencies. “You need a real Fed pivot“, he pointed out. Gundlach also warned of the growing risk of deflation, noting it’s time to be bearish in the stock market.

Jeffrey Gundlach talks about Fed rate hikes, the US economy and whether to buy cryptocurrencies.

Founder and CEO of investment management firm Doubleline, Jeffrey Gundlach, this week shared his outlook on the U.S. economy, stock and bond markets, and when to buy cryptocurrencies. Based in Tampa, Fla., Doubleline has more than $107 billion in assets under management (AUM) as of June 30.

In an interview given to the American channel CNBC on the sidelines of the conference Future Proof 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 now is a good time to buy cryptocurrency in the current market conditions, Gundlach opined:

I would definitely not be a buyer today.

Jeffrey Gundlach is sometimes known as the King of Bonds after appearing on the cover of Barron’s in 2011 as “the new king of bonds“. Institutional Investor named it “Money Manager of the Year” in 2013 and Bloomberg Markets ranked it among the “fifty most influential” in 2012, 2015 and 2016. He was inducted into the Fixed Income Hall of Fame of FIASI in 2017. His fortune is currently around 2.2 billion.

In Tuesday’s interview, the billionaire pointed out that the time to step back into the crypto space would be when the Federal Reserve pivots rate hikes and begins its policies of “free money“. Citing the Federal Reserve’s hawkish stance and recession fears, Jeffrey Gundlach pointed out:

I think you buy cryptocurrencies when they start making free money again… You need a real Fed kingpin.

He added that investors should not buy crypto when there are only “dreams” of a monetary policy pivot.

Doubleline’s CEO also warned of the growing risk of deflation, seeing it as the main threat to the US economy and markets. He explained that it’s time for investors to get more bearish on US stocks, noting that the S&P 500 could fall 20% by mid-October.

Credit market action consistent with weak economy and struggling stock market“, described Jeffrey Gundlach, specifying:

I think you need to start getting more bearish.

While admitting that stock picking is not his forte, he said: “Still wanna own stocks, but I’m a little lighter“. Nonetheless, he sees emerging markets as the biggest opportunity ahead for equity investors.

Citing the risk of deflation, he suggested investors dive into long-term US debt securities. “Buy long-term Treasurys“, he advised, insisting:

The risk of deflation is much higher today than it has been for the past two years.

Regarding the schedule, he clarified: “I’m not talking about next month. I’m talking about a little later next year, certainly in 2023.

Recently, Tesla CEO Elon Musk also warned that a significant Fed rate hike could lead to deflation, echoing Ark Invest CEO Cathie Wood’s statement that “leading inflation indicators such as gold and copper signal the risk of deflation.

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