The Man Known as the King of Wall Street Announces FED Interest Rate and Inflation Forecasts for 2026!

Bitcoin fell below $77,000 as renewed US-Iran tensions escalated and higher inflation concerns led to widespread risk aversion in the markets.

At this point, the likelihood of the Fed cutting interest rates in 2026 has decreased, while a well-known figure stated that it is almost impossible for the Fed to cut interest rates this year.

Jeffrey Gundlach, CEO of DoubleLine Capital and known as the “Bond King” on Wall Street, assessed the likelihood of the US Federal Reserve cutting interest rates as very low.

Appearing on Fox News’ “Sunday Morning Futures,” Jeffrey Gundlach claimed there will be no interest rate cuts at the next Fed policy meeting or later in the year.

Gundlach argued that a rate cut was impossible because the yield on US two-year Treasury bonds was trading approximately 50 basis points above the federal funds rate.

“People were expecting two interest rate cuts this year, but inflation conditions are not favorable. I believe that cutting interest rates is impossible when the two-year Treasury yield is approximately 50 basis points (1 bp = 0.01%) higher than the benchmark interest rate.”

The two-year Treasury bond yield is considered a sensitive indicator reflecting the outlook for the Fed’s monetary policy.

Gundlach also predicted that inflationary pressures in the US were increasing again due to the war in Iran and rising oil prices.

At this point, he stated that the US Consumer Price Index (CPI), which was announced at 3.8% in April and experienced its highest increase since May 2023, would rise even further.

“According to Doubleline’s model, the next CPI figure will start at 4%.”

Concerns about next year’s US inflation are also rapidly increasing on the forecasting platform Polymarket.

Polymarket’s probability of US inflation exceeding 4% in 2026 has risen to 97%, a sharp increase of 63 percentage points from the previous figure. Specifically, high volatility in international oil prices due to rising tensions between the US and Iran is fueling concerns about a renewed price increase.

*This is not investment advice.