economy
Jeffrey Gundlach says Fed's Warsh is not going to be the 'easy money' chairman many hoped for
Gundlach said Warsh's stance reduces the risk of overly accommodative monetary policy that could reignite inflation and push longer-term borrowing costs higher.
TL;DR
- Jeffrey Gundlach believes new Federal Reserve Chairman Kevin Warsh is signaling a more hawkish stance than anticipated.
- Warsh's emphasis is on delivering price stability, indicating less inclination for easy monetary policy.
- The Fed's policy statement and Warsh's remarks highlighted a commitment to bringing inflation back to 2%.
- Warsh declined to submit an individual interest-rate projection and signaled a review of the Fed's communications framework.
- Gundlach suggests Warsh's focus on price stability reduces the risk of overly accommodative policies that could reignite inflation.
- This hawkish stance strengthens the case for owning long-term U.S. Treasuries.