According to him, the Fed's "hawkish" policy will drag the American economy down, and if the Central Bank continues to raise rates in 2022, the economic problems will only intensify. “It is likely that with a few Fed rate hikes - perhaps around four - we will face economic problems,” he said. Growth to 1% or 1.5% at the key federal funds rate will kill the economy. "
Gundlach also does not believe that US inflation will drop below 4% year on year in 2022. Rather, inflation could rise to 7% y / y in the coming months.
As for gold, he believes that the yellow precious metal is "boring" and "shockingly stable" in the face of commodity inflation and the wild volatility of the bitcoin cryptocurrency this year. “Gold and silver are kind of orphans in the commodity market. They haven't grown at all, ”Gundlach said.
For gold prices to recover, the US dollar needs to reverse, he said. “The dollar is putting pressure on gold. I think if the dollar falls, then gold will rise. " Gundlach himself continues to hold gold as a long-term investment and last bought the precious metal in September 2018 when one ounce was worth around $ 1,180. "But this year, buying gold relative to other assets was unwarranted."