Trust the bond market, not the Fed, on interest rates, Gundlach says

MarketWatch/Steve Goldstein/1-11-2023

“Right now there’s a gap between where the bond market says interest rates are heading, and where Federal Reserve officials say they’re going — and the so-called bond king says investors should put their faith in markets.”

USAGOLD note: Obviously Gundlach is among Wall Street’s rebels…… He says his forty years experience in finance is telling him to trust what the bond market is telling him over what the Fed is telling him. The Fed’s Neil Kashkari takes the opposite view. “I’ve spent enough time around Wall Street to know that they are culturally, institutionally, optimistic,” he says. “They are going to lose the game of chicken, I can tell you that.” Gundlach, in short, believes interest rates are in for a period of decline. Kashkari believes they are headed higher. Looking at the chart, though,  it is difficult to read what the bond market is telling us.

Chart courtesy of TradingEconomics.com