(Bloomberg) The Federal Reserve is likely to cut its benchmark interest rate another 50 basis points when it meets this month to try to cushion the U.S. economy from the widening impact of the coronavirus, according to money manager Jeffrey Gundlach.
“I think they cut 50 in the next meeting in just two weeks,” Gundlach said Thursday in an interview on CNBC.
Fears of the coronavirus spreading across the U.S. and disrupting the broader economy have hit markets hard. The S&P 500 Index has dropped 9% in the past 10 days, companies have issued financial and sales warnings, and 10-year Treasury yields hit record lows.
The sudden swing in sentiment after months of bullish performance has left policy makers scrambling -- including the Fed’s emergency rate cut earlier this week -- and investors wondering if they’re seeing a repeat of 2008’s meltdown.
Gundlach also said in the interview that he likes gold here.
The precious metal is one of the standout winners from the outbreak, with Goldman Sachs Group. saying the commodity “has immunity to the virus.” Gundlach told CNBC that gold is the best thing to own now and is headed to new highs. Bullion’s jump has come as equities sank and the Federal Reserve enacted an emergency rate cut.
