Gundlach Says Listen to Bond Market, Not Fed on Rates

The video discusses how the bond market, rather than the Federal Reserve, is a better indicator of future interest rates. It highlights the discrepancy between the Fed's projected terminal rate and the market's pricing, with the market expecting a lower rate. Various opinions are presented, including those of bond managers and financial leaders like Jamie Dimon, on whether rates will rise above 5% or fall due to a potential recession. The video also examines the easing of financial conditions and how Powell's lack of response to market rallies might be seen as an endorsement.

What does the bond market suggest about the Federal Reserve's interest rate target by mid-year?

• It will exceed 5%

• It will be just under 5%

• It will be below 4%

• It will be exactly 5%

How does the bond market's projection for the terminal rate compare to the Federal Reserve's median projection?

• The bond market projects a higher rate

• The bond market projects the same rate

• The bond market projects a lower rate

• The bond market does not project a rate

What is a potential reason for treasury yields to drop to 2% according to bond managers?

• An increase in inflation

• A stable economic environment

• A recession requiring rate cuts

• A strong economic growth

What change in financial conditions is noted for the first time since April?

• Easier conditions

• Stable conditions

• More restrictive conditions

• Unchanged conditions

How did some interpret Powell's lack of response to the bond market rally?

• As a call for caution

• As a sign of confusion

• As an implicit endorsement

• As a sign of disagreement