DoubleLine's Jeffrey Gundlach sees no more Fed rate cuts under Jerome Powell

• Powell has only two policy meetings remaining (March and April) before his term expires, with a new chair expected to take over in June pending Senate confirmation
• Fed funds futures markets are currently pricing in just two quarter-point rate cuts by the end of 2026, reflecting reduced expectations for monetary easing
• Gundlach recommends investors allocate 30%-40% of portfolios to unhedged international equities to benefit from potential U.S. dollar weakness

Summary: DoubleLine's Gundlach Predicts No Further Fed Rate Cuts Under Powell

DoubleLine Capital CEO Jeffrey Gundlach stated Wednesday that he does not expect the Federal Reserve to cut interest rates again during Jerome Powell's tenure as chair. Powell has only two policy meetings remaining—in March and April—before his term expires, with a new chair expected to lead the June meeting pending Senate confirmation.

Key Developments:

• The Fed held rates steady at 3.5%-3.75% on Wednesday
• The Federal Open Market Committee (FOMC) noted economic activity is "expanding at a solid pace" and unemployment has shown signs of stabilization
• Powell indicated inflation remains "a little elevated" but less concerning than feared months ago
• Powell suggested current policy may not be "significantly restrictive" given incoming data

Market Outlook:

Fed funds futures currently price in two quarter-point rate cuts by end of 2026. However, Gundlach believes Powell is emphasizing reduced tension between the Fed's dual mandate of price stability and maximum employment, effectively setting the stage for a prolonged hold.

Investment Recommendations:

Gundlach reiterated his preference for international diversification, advising investors to allocate 30%-40% of portfolios to unhedged international equities. He believes these positions could benefit from local currency appreciation against a secularly weak U.S. dollar, even amid potential economic weakness.

Market Implications:

The stance suggests a stabilizing monetary policy environment with rates potentially remaining elevated longer than markets currently anticipate, favoring international exposure over domestic dollar-denominated assets.