‘New Bond King’ Gundlach Warns U.S. CPI Will Top 4%, Rules Out Near-Term Fed Rate Cut

DoubleLine Capital CEO Jeffrey Gundlach, known as the “New Bond King,” believes the war in Iran will drive up global oil prices and reignite inflationary pressure in the United States. A sharp rebound in inflation could force the Federal Reserve to keep interest rates higher for longer, weighing on U.S. Treasuries, equities and corporate borrowing costs.

Gundlach predicts that the U.S. consumer price index report due in August 2026 will show annual inflation above 4%. With the Treasury yield curve inverted and energy prices rising, he said a near-term Fed rate cut is “simply impossible.” Incoming Chair Kevin Warsh will also take the helm as inflation accelerates and policy options become more constrained.