No Fed Rate Cuts in 2026, Investors Should Hold Cash, Gold: Jeff Gundlach

Key Points:

• Jeffrey Gundlach, CIO of DoubleLine Capital, advises investors to increase holdings in cash, gold, and real assets due to risks of the Federal Reserve hiking rates instead of cutting them this year.
• Gundlach warns that relying on expectations of two to three Fed rate cuts by the end of 2026 is misguided, as the likelihood of cuts in 2024 has dropped to around 12%, while the chance of rate hikes has risen to 16%.
• Rising oil prices from the Iran conflict have heightened inflation concerns, negatively impacting the outlook for rate cuts and contributing to stock market volatility despite record highs.
• Gundlach recommends a portfolio allocation of 20% cash, 20% hard assets like commodities, and a notable interest in gold, suggesting increased exposure to real assets compared to his previous guidance.
• He views current stock valuations as high relative to the risks of rising rates and emphasizes buying gold aggressively if prices fall below $3,500 an ounce.