DoubleLine Capital CEO Jeffrey Gundlach said Tuesday that the Federal Reserve needs to ease policy swiftly amid the current economic slowdown, seeing a half-point interest-rate reduction this week. “The Fed just follows the two-year Treasury and the two-year Treasury is down at 3.6% so the Fed needs to cut rates [by] 150 [basis points] pretty quickly,” Gundlach told CNBC’s Scott Wapner at the Future Proof Conference in Huntington Beach, California. “I think they are going to start with 50 [basis points] tomorrow.” Markets currently are pricing in a 60% chance that the Fed will approve a 50 basis point reduction at the conclusion of its policy meeting Wednesday, according to the CME Group’s FedWatch tool. A quarter-point rate cut had been the consensus as recently as a week ago. Fed funds, the central bank’s benchmark overnight lending rate, currently stand at 5.25% to 5.50%. But the 2-year Treasury yield was last at around 3.59%. The size of the Fed’s first rate cut in years has been a point of debate on Wall Street. On the one hand, a rate cut could help boost earnings growth for companies following a period of high borrowing costs and stubborn inflation. On the other hand, a reduction steeper than previously expected could spark concerns about the health of the economy, which has shown some signs of weak …
