Billionaire Jeff Gundlach talks about the opportunity to buy crypto-currencies and also warns of the risk of deflation

Billionaire Jeffrey Gundlach, aka “the bond king“, gave his opinion on when to buy crypto-currencies. “You need a real pivot from the Fed” he stressed. Gundlach also warned of the growing risk of deflation, noting that it is time to be bearish on the stock market.

Jeffrey Gundlach talks about Fed rate hikes, the U.S. economy and the opportunity to buy crypto-currencies.

Founder and CEO of investment management firm Doubleline, Jeffrey Gundlach, shared his outlook on the U.S. economy, the stock and bond markets, and when to buy crypto-currencies this week. Based in Tampa, Florida, Doubleline has more than $107 billion in assets under management (AUM) as of June 30.

In an interview with U.S. broadcaster CNBC on the sidelines of the conference Future Proof on Tuesday, the billionaire explained that it’s too early to jump on the crypto bandwagon, as the Federal Reserve is likely to raise interest rates further.

Commenting on whether it’s the right time to buy crypto-currencies under current market conditions, Gundlach opined:

I certainly wouldn’t be a buyer today.

Jeffrey Gundlach is sometimes known as the Bond King after appearing on the cover of Barron’s in 2011 as “the new bond king“. Institutional Investor named it “Money Manager of the Year” in 2013 and Bloomberg Markets ranked him among the “fifty most influential” in 2012, 2015 and 2016. He was inducted into the Fixed Income Hall of Fame of FIASI in 2017. His current wealth is approximately 2.2 billion.

In Tuesday’s interview, the billionaire noted that the time to return to the crypto space would be when the Federal Reserve pivots rate hikes and begins its policies of “free money“. Citing the hawkish stance of the Federal Reserve and fears of recession, Jeffrey Gundlach noted:

I think you buy crypto-currencies when they start making free money again… You need a real pivot from the Fed.

He added that investors should not buy crypto when there are only “dreams“of a monetary policy pivot.

Doubleline’s CEO also warned of the growing risk of deflation, calling it the main threat to the U.S. economy and markets. He explained that it’s time for investors to become more pessimistic about U.S. stocks, noting that the S&P 500 could fall 20% by mid-October.

“The action of the credit market is consistent with the weakness of the economy and the difficulties of the stock market“, described Jeffrey Gundlach, noting:

I think you have to start getting more bearish.

While admitting that stock picking is not his forte, he said, “You still want to own stocks, but I’m a little lighter“. Nevertheless, he sees emerging markets as the biggest opportunity ahead for equity investors.

Citing the risk of deflation, he suggested that investors dive into long-term U.S. debt securities. “Buy long-term Treasurys“, he advised, insisting:

The risk of deflation is much higher today than it has been in the past two years.

Regarding the timing, he clarified, “I’m not talking about next month. I’m talking about a little bit later next year, certainly 2023. “

Recently, Tesla CEO Elon Musk also warned that a significant Fed rate hike could lead to deflation, echoing Ark Invest CEO Cathie Wood’s statement that “leading inflation indicators like gold and copper signal the risk of deflation.“