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Billionaire Jeffrey Gundlach aka the Bond King shared his views on when to buy cryptocurrency. “You need a real pivot from the Fed,” he stressed. Gundlach also warned of the growing risk of deflation, noting it’s time to be bearish in the stock market.

Jeffrey Gundlach on Fed Rate Hikes, the US Economy, and When to Buy Crypto

Founder and CEO of investment management firm Doubleline, Jeffrey Gundlach, shared his outlook on the US economy, stock and bond markets, and when to buy crypto this week. Based in Tampa, Fla., Doubleline had more than $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’s too early to jump on the crypto bandwagon as the Federal Reserve is likely to raise interest rates further.

Commenting on whether now is a good time to buy cryptocurrency under current market conditions, Gundlach said:

I certainly wouldn’t be a buyer today.

Gundlach is sometimes known as the Bond King after appearing 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 among the “Fifty Most Influential” in 2012, 2015 and 2016. He was inducted into the FIASI Fixed Income Hall of Fame in 2017. value is currently around 2.2 billion.

In Tuesday’s interview, the billionaire pointed out that the time to step back into the crypto space would be when the Federal Reserve abandons rate hikes and begins its “free money” policy. Citing the Federal Reserve’s hawkish stance and recession fears, Gundlach pointed out:

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.

Doubleline’s CEO also warned of the growing risk of deflation, seeing it as the main threat to the US economy and markets. He explained that it was time for investors to get more bearish on US equities, noting that the S&P 500 could fall 20% by mid-October.

“The credit market action is consistent with economic weakness and stock market difficulties,” Gundlach described, adding:

I think you need to start getting more bearish.

While admitting stock picking isn’t his forte, he said, “You still want to own stocks, but I’m a little lighter.” Nonetheless, he sees emerging markets as the biggest opportunity ahead for equity investors.

Citing the risk of deflation, he suggested investors dive into long-term US debt securities. “Buy long-term Treasuries,” he advised, noting:

The risk of deflation is much higher today than it has been for the past two years.

Regarding the calendar, he clarified: “I am not talking about next month. I’m talking about a bit later next year, definitely in 2023.”

Recently, Tesla CEO Elon Musk also warned that a major Fed rate hike could lead to deflation, echoing Ark Invest CEO Cathie Wood’s statement that “key inflation indicators like gold and copper are signaling the risk of deflation”.

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What do you think of billionaire Jeff Gundlach’s comments on deflation and when to buy crypto? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

Image credits: Shutterstock, Pixabay, Wiki Commons

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