2023-05-06 19:12:57
Billionaire Jeffrey Gundlach believes that the crisis of regional banks in America will remain unless the Federal Reserve cuts interest rates.
In an interview with CNBC, the co-founder of DoubleLine Capital said that despite Federal Reserve Chairman Jerome Powell’s remarks that the crisis has improved, deposits will continue to flee the bank.
He added: These people withdraw their money outside the bank because there is no reason to keep it there.
And he continued: It seems to me that these deposits will continue to flow out..I do not think that what is happening is the final chapter in the problem of regional banks.
And Gundlach continued: Keeping interest rates at those high levels will lead to the continuation of this tension..I think, to a very large extent, that there will be more bank collapses.
He also stressed that Powell’s statements on the day of the Fed’s meeting did not indicate that the Fed plans to cut rates in the near future.
Last week, Powell said that there is still a long way to go in order to reduce inflation rates towards the target level, and he also mentioned that monetary policy needs time in order to achieve all goals.
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