The "new debt king" Gundlach pointed out that the United States will begin to decline in the next few months, and the Federal Reserve is expected to cut interest rates several times this year.

(Reuters file photo)

[Compile Wei Guojin/Comprehensive Report] Jeffrey Gundlach, the founder of Double Line Capital, known as the "new debt king", pointed out that the United States will begin to decline in the next few months, and due to the obvious weakness of the overall economy, it is expected that the Federal Reserve ( Fed) will cut interest rates several times this year; but BlackRock, the world's largest asset management company, believes that it is wrong to bet on the Fed's imminent rate cut because the Fed has shown that the recent banking crisis will not stop it from fighting inflation.

The new debt king calls for interest rate cuts to save the economy, BlackRock Investment does not agree

"A recession is developing, I think for the next few months; the Fed will need a 'very dramatic' response," Gundlach said.

He expects the Fed to cut interest rates this year and warns that if the Fed raises interest rates again at the next May policy meeting ○.

Twenty-five percentage points (one yard), "will backfire and trigger a severe liquidity squeeze in the banking system, which in turn will lead to more unrealized losses."

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BlackRock Investment Institute takes the opposite view, saying in a note to clients, "We don't see a rate cut this year, the old trick of central banks trying to rescue the economy when a recession hits; Fight less, but still don't cut rates."

The report added that the Fed is only likely to cut interest rates if there is a more severe credit crunch and triggers a deeper than expected recession.

The acquisition of some assets of Silicon Valley Bank (SVB) on the 27th eased investors' doubts about the banking crisis. Traders are now betting that the probability of the Fed raising interest rates by one yard in May is higher than pausing interest rate hikes.

Fed Director Jefferson said on the 27th that the current inflation in the United States is still too high. The goal of the Federal Open Market Committee is to reduce inflation to 2% as soon as possible, but it will take some time; The balance between stabilizing prices and the responsibility to maintain financial stability after the collapse of the SVB.

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