Jeffrey Gundlach, CEO of DoubleLine Capital and known as the “Bond King”, said he expects the Federal Reserve to raise interest rates at its March meeting next week, which will be “the last hike” despite continued market challenges! So, how will the Bitcoin price be affected? Here are the details…
“Bond King” Gundlach reveals his thoughts on FED rate decision
In an interview with CNBC on Monday, March 13, Jeffrey Gundlach, CEO of investment management firm Doubleline, spoke about the Federal Reserve rate hike expectations. Regarding whether the Federal Reserve will raise interest rates at the Federal Open Market Committee (FOMC) meeting next week, Gundlach said, “At this point, I think the Fed will not raise rates by 50 basis points, but will increase it by 25 basis points. A 25 basis point increase is likely to be made to maintain the Bank’s credibility. However, I can think that this will be the last increase,” he said.
On the other hand, Gundlach, who thinks that the recent bankruptcies such as Silicon Valley Bank and Signature Bank have disrupted Fed Chairman Powell’s game plan, said, “I wouldn’t have done it myself.” He stated that he thought that further tightening in the US monetary policy would make the economy more difficult and that it would not be the right decision at the moment. This thought is extremely important as it may cause a change in Bitcoin price with the FED’s rate hike.
Gundlach: “I think inflationary policy is back in action!”
While the billionaire CEO states that he expects an interest rate hike in March, he also acknowledges the possibility that the FED may not raise interest rates. The “Bond King” reports that the market is currently pricing this possibility as a kind of “coin flip”. He also reiterated his warning of an impending recession, referring to the dramatic steepening of the treasury yield curve that often precedes an economic downturn. “In all past recessions dating back decades, the yield curve starts to invert a few months before the recession arrives,” the billionaire commented, adding:
“I think with the Federal Reserve, inflationary policy has come back into play … It’s putting money into the system through the lending program.”
Meanwhile, the US Treasury Department, the Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC) announced a plan to support depositors in Silicon Valley Bank and Signature Bank on Sunday. The Treasury Department will procure up to $25 billion from the FX Stabilization Fund to cover potential losses from the funding program. The Federal Reserve also announced that it will provide loans for up to one year to organizations affected by bank failures.
Bitcoin (BTC) price is on the rise
The price of the leading cryptocurrency Bitcoin (BTC) is on the rise. As reported by Kriptokoin.com, the leading crypto, which managed to break the resistance point of 26 thousand dollars, saw an increase of 11.3 percent in its price in the last 1 week. Although it managed to exceed $ 26 thousand, BTC, which could not hold at that level, returned to its instant price of $ 24,718.74.
Leading crypto money experts and analysts state that the interest rate decision that the FED will announce next week is extremely important for the Bitcoin price. Experts advise investors to follow the market closely and be careful next week.
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