Gundlach: Warsh Won't Be the 'Easy Money' Fed Chair Markets Hoped For

Jeffrey Gundlach, one of the most respected voices in the bond market, commented on the outcome of the Fed's June meeting and the position of its new chairman. According to Gundlach, many market participants had hoped Warsh would prove more dovish than his predecessors and move quickly to cut rates. Those expectations have been dashed: Warsh made clear that fighting inflation remains the priority, rather than supporting economic growth through cheap credit. Gundlach views this approach as broadly sound, as it reduces the likelihood of another surge in prices. Nevertheless, investors in equities and real estate will need to adapt to an environment of persistently higher long-term rates, which inevitably weighs on asset valuations.