Jeffrey Gundlach: Worry the inflation problem isn't being fully respected

Summary

Jeffrey Gundlach joined Closing Bell after the Fed decision to argue the inflation problem is not being fully respected. He said he would have dissented and voted for a 50 basis point hike, pointing to core PCE trending higher, elevated import/export prices, and signs of inflation psychology in commodities and retail pricing. He also warned that the Fed appears behind the curve and that front-end Treasury rates may need to adjust higher.

• Gundlach criticized the Fed press conference as light on content and said he would have dissented with a 50 bps hike.
• He argued inflation is not falling fast enough, with core PCE at 3.3% and import/export prices averaging 7.8%.
• He pointed to the 2-year Treasury yield above the fed funds rate and rising after the hike as evidence the Fed is behind the curve.
• He cited commodity strength and oil above $100 as signs of building inflation psychology.
• He used Costco's Kirkland motor oil price increase as an anecdote about hoarding and higher price expectations.
• He attributed recent GDP Now strength partly to inventory increases rather than clean underlying demand.