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Gundlach Urges Fed to Slow Rate Hikes as Summers Prefers 1% Jump

  • Fed should trim hikes to 25 BPs to avoid oversteer: Gundlach
  • Increase of 100 basis points would boost credibility: Summers
Jeffrey Gundlach at the Milken Institute Global Conference in 2015.
Jeffrey Gundlach at the Milken Institute Global Conference in 2015.

Photographer: Bloomberg

Jeffrey Gundlach of DoubleLine Capital is worried the Fed will choke off economic growth by raising interest rates too fast. Former Treasury Secretary Larry Summers is among those saying the central bank needs to hike even faster to restore its credibility.

Gundlach, the chief investment officer of DoubleLine Capital, believes the Fed will probably tighten by 75 basis points at its September meeting but he would prefer just 25 basis points due to concerns about potential oversteer. Policy makers also haven’t paused long enough to see what effect the previous hikes have already had, he said in an interview with CNBC.