Jeffrey Gundlach: Powell’s ‘We Don’t Know’ Signals Rising Fed Uncertainty

Jeffrey Gundlach analyzes the Federal Reserve's recent meeting, highlighting the central theme of uncertainty ("we don't know") expressed by Jay Powell. The Fed's revised inflation assessment for 2026, increasing from 2.4% to 2.7% due to rising commodity prices, particularly oil, is examined. Gundlach argues that the two-year Treasury yield dictates the Fed funds rate, not vice versa, pointing out historical instances where the Fed lagged behind market signals. He suggests the market is not pricing in expected rate cuts and advises investors to favor high-quality assets, avoid the long end of the bond market, and consider non-U.S. equities, given the growing U.S. budget deficit and national debt.