Closing Bell Closing Bell: Fed Leaves Rates Unchanged 6/18/25
Jun 18, 2025
Jeffrey Gundlach, CEO of Double Line Capital, shares his expert take on the Federal Reserve's latest meeting and its implications for the bond market. He delves into rising inflation and economic forecasts, providing strategic insights for investors. Steve Leisman adds depth with updates on market reactions and economic uncertainties, including concerns around oil prices and military actions in the Middle East. Together, they navigate the complexities of interest rates and the evolving landscape of economic policy.
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Fed's Stagflation Outlook
- The Fed now expects higher inflation and lower economic growth, signaling a stagflation risk.
- They seem more likely to prioritize lowering unemployment over controlling inflation aggressively.
Yield Curve Signals Recession Risk
- The yield curve steepening suggests market predicts future Fed rate cuts despite rising inflation.
- Unemployment rate and claims rising indicate growing risk of recession ahead.
Credit Market Anomalies
- Credit markets saw massive volatility but have mostly recovered to pre-April levels.
- Lower quality loan spreads oddly improved despite mounting defaults, signaling fragility and market distortion.