Bond King : Recession Set to Bring Painful Outcomes

• Billionaire Jeffrey Gundlach, AKA the „Bond King,“ has cautioned of “painful outcomes” in the next recession.
• The Federal Reserve is attempting to curb inflation, but Gundlach believes this could lead to a “very high severity problem”.
• He advises that investors should prepare for a potential downturn by having protection strategies in place.

Jeffrey Gundlach: Warnings of ‚Painful Outcomes‘ in Next Recession

Billionaire Jeffrey Gundlach, also known as the „Bond King,“ has warned of „painful outcomes“ that are likely to come with the next recession. As chief executive officer and chief investment officer of investment management firm Doubleline, he shared his outlook on the U.S. economy with Yahoo Finance last week.

Federal Reserve Attempts to Curb Inflation

Gundlach noted that one indicator of a recession is if the unemployment rate crosses its 36-month moving average and that historically when there is more than a 50-basis-point rise in unemployment rate, it suggests you’re in more of a hard-landing type of recession. He added that the Federal Reserve’s attempt to never have a significant downturn in the economy could lead to worse problems down the road: „The more you try to reduce the severity of problems, you’re going to end up ultimately having a very high severity problem.“

Gundlach’s Rule of Financial Physics

Gundlach referred to his own rule – dubbed “Gundlach’s rule of financial physics” – which states that “the frequency of problems times the severity of problems equals a constant”. He believes that by attempting to reduce the severity of economic issues now, ultimately worse problems will arise later on down the line.

Advice for Investors

The billionaire advised investors that regardless if it’s soft or hard landing, it’s important to have certain degree protection from potential downturns: „People are always asking me this question: ‚How bad is the recession going to be?‘ It doesn’t matter, as long as we’re going into a recession, you have to have a certain degree of protection.“

Net Worth & Background

Jeffrey Gundlach currently has an estimated net worth $2.2 billion and was even featured on Barron’s cover in 2011 with title “The New Bond King” due his achievements within investments over years.

Fed’s 2% Inflation Target Could Crush US Economy, Economist Warns

• Economist Mohamed El-Erian has warned that the Federal Reserve cannot achieve its 2% inflation target without crushing the U.S. economy.
• He suggested a higher stable inflation rate of 3-4%.
• The Allianz economic advisor criticized the Fed for being too data dependent and warned that it could lose credibility if it changes its inflation target.

Economist Warns of Crushing US Economy

Economist Mohamed El-Erian, Allianz’s chief economic advisor and chair of Gramercy Funds Management, has warned that the Federal Reserve cannot achieve its 2% inflation target without „crushing“ the U.S. economy. He suggested that a higher stable inflation rate of 3-4% is necessary for a sustainable recovery.

Fed Criticized for Being Too Data Dependent

The Allianz economic advisor criticized the Fed for being too data dependent and warned that it could lose credibility if it changes its inflation target. El-Erian argued that there are several factors necessitating a higher target inflation rate, including energy transition, supply chain changes due to COVID, tight labor markets, and changing geopolitical issues.

January CPI Report

The government’s consumer price index (CPI) data released Tuesday showed prices increasing by 0.5% in January on a month-by-month basis – the most since October – while on an annual basis consumer prices climbed 6.4%, down from 6.5% in December. Following this report several Fed officials said they may have to raise interest rates beyond initial expectations in order to subdue ongoing price pressures.

Predictions of “Sticky” Inflation Around 4%

In January El-Erian predicted that inflation may become „sticky“ around 4%. This would be an increase from current levels and suggests the Fed should take into account long term goals rather than focusing solely on short term data when making decisions about interest rates and other monetary policy measures .

Credibility at Stake

El-Erian further asserted that if the Federal Reserve were to change their official inflation target after having missed their current goal by such a large margin it could result in serious damage to their credibility as an institution responsible for guiding monetary policy decisions in America .

Bit2Me Debit Card: Get 9% Cashback on All Purchases

• Bit2Me has launched a debit card that works across the Mastercard network.
• The card offers up to 9% cashback on all purchases, and can be linked to 8 top cryptocurrencies with more to follow.
• It also includes features such as the ability to lock and unlock the card, configure usage limits, and safety-related support for NFC.

Bit2Me Debit Card Launch

Bit2Me, the biggest Spanish exchange and first company recognized as a virtual service provider by the Bank of Spain, has just launched a long-awaited debit card that works across the entire Mastercard network.

Cashback Benefits

The Bit2Me debit card enables crypto-stablecoin payments across more than 90 million global businesses and up to 9% cash back on all payments. It can also be used in-store & online using NFC-enabled mobile devices, such as smartphones and smartwatches. Right now the card can be linked to 8 top cryptocurrencies with more to follow—B2M, BTC, ETH, ADA, XRP, SOL, DOT, and USDT—allowing users to pay securely for goods and services.

Seamless User Experience

Unlike some competing crypto cards, Bit2Me’s allows users to make cash withdrawals at ATMs & instant online payments without having to manually exchange funds on the app. It also provides secure features like being able to lock/unlock cards and configure usage limits for added safety.

Integrating Cryptocurrencies into Mastercard Network

Achieving this level of cryptocurrency integration wasn’t easy; it took dozens of professionals two years of work modify transaction flows according part of international payment protocols so customers could use cryptocurrencies safely & transparently for businesses while getting up 9% cash back on purchases.

Future Plans admin, 12. Februar 2023. Category: Allgemein.