Fed to Raise Rates Next Week? Bond King Jeffrey Gundlach Weighs In

• Billionaire Jeffrey Gundlach, the „Bond King,“ expects the Federal Reserve to raise interest rates at its March meeting next week.
• Goldman Sachs no longer expects a rate hike in March following the collapses of Silicon Valley Bank and Signature Bank.
• The Treasury Department and Federal Reserve have provided a plan to support depositors impacted by the bank failures.

Billionaire ‚Bond King‘ Jeffrey Gundlach’s Fed Rate Hike Expectations

Jeffrey Gundlach, aka the „Bond King,“ is expecting the Federal Reserve to raise interest rates at its March meeting next week. He cautioned that this could be „the last increase“ as inflationary policy re-enters play with the Federal Reserve.

Goldman Sachs Revises Rate Hike Prediction

Following recent banking collapses, such as Silicon Valley Bank and Signature Bank, many economists have revised their rate hike predictions. Global investment bank Goldman Sachs is no longer expecting a Fed rate hike in March.

Treasury Department and Federal Reserve Provide Support for Depositors

The Treasury Department announced it will offer up to $25 billion from its Exchange Stabilization Fund to cover potential losses from failed banks, while the Federal Reserve has also granted loans for up to one year for entities affected by bank failures.

Gundlach’s Thoughts on Fed Rate Hikes

Jeffrey Gundlach advised against raising rates but acknowledged that the Federal Reserve may still do so in order maintain its credibility after messaging over past six months. He believes if they do decide to raise rates, it would be 25 basis points—which he thinks would be the last increase before stalling out.

Coin Flip Predictions

The market is currently pricing in a 50/50 chance of whether or not there will be a rate hike in March, according to Gundlach. He reiterates his warning about an upcoming recession due to high debt levels; however, he believes that raising rates would not help alleviate this issue further down the line