Treasury yields hit highest level since Brexit as stocks tumble
by Mark DeCambre
Don’t blame DoubleLine’s Jeff Gundlach for causing the stock market to tumble the most since the aftermath of the U.K.’s decision to break from the European Union, which roiled global markets in late June.
The star fixed-income money manager didn’t spark Friday’s rout, but he may have brought investors closer to the precipice by suggesting the Federal Reserve could stun Wall Street by hiking rates unexpectedly, dialing up rates even as fed-fund futures—a measure of rate-hike expectations—have implied that an increase of benchmark interest rates is far from a sure thing.
“They want to show that they are not guided by the markets,” Gundlach said in an interview with Reuters on Thursday. “The Fed wants to show, at some point, that they can’t be replaced by WIRP (World Interest Rate Probability). The only way they can do that is to tighten when WIRP is below 50,” he said.