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Billionaire Jeffrey Gundlach, also known as the Bond king, has shared his views on when to buy cryptocurrency. “You need a real Fed pivot,” he stressed. Gundlach also warned of the growing risk of deflation, noting that it is time to be bearish on the stock market.
The founder and CEO of investment management firm Doubleline, Jeffrey Gundlach, shared his views on the US economy, stock and bond markets, and when to buy crypto this week. Headquartered in Tampa, Florida, Doubleline has over $107 billion in assets under management (AUM) as of June 30.
In an interview with CNBC on the sidelines of the Future Proof conference on Tuesday, the billionaire explained that it is too early to jump on the crypto bandwagon as the Federal Reserve is likely to raise more interest rates.
Commenting on whether it is a good time to buy cryptocurrency in the current market conditions, Gundlach said:
I certainly wouldn’t 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 as one of “The Fifty Most Influential” in 2012, 2015 and 2016. He was inducted into the FIASI Fixed Income Hall of Fame in 2017. His net value is currently around NOK 2.2 billion.
In the Tuesday interview, the billionaire emphasized that the time to return to the crypto space would be when the Federal Reserve pivots from interest rate hikes and begins its “free money” policy. Referring to the Federal Reserve’s hawkish stance and fear of recession, Gundlach emphasized:
I think you buy crypto when they make free money again… You need a real Fed pivot.
He added that investors should not buy crypto when there are only “dreams” of a monetary policy pivot.
The Doubleline boss also warned of the growing risk of deflation, seeing it as the most important threat to the US economy and markets. He explained that it is time for investors to become more bearish on US 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 problems,” described Gundlach, elaborating:
I think you need to start getting more bearish.
While admitting that stock picking is not his forte, he said: “You always want to own stocks, but I’m a bit on the lighter side.” Nevertheless, he sees emerging markets as the biggest upcoming opportunity for equity investors.
Citing the risk of deflation, he suggested that investors dive into long-term US debt securities. “Buy long-term Treasuries,” he advised, stressing:
The deflation risk is much higher today than it has been in the last 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 such as gold and copper are flagging the risk of deflation.”
What do you think of billionaire Jeff Gundlach’s comments about deflation and when to buy crypto? Let us know in the comments section below.
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