Billionaire bond investor Jeffrey Gundlach said Friday that inflation in consumer prices is likely to remain elevated through the end of the year and stay above 4% through at least 2022.
Citing pressures from shelter costs and rising wages, the head of DoubleLine Capital told CNBC that he sees the current inflation run as non-transitory.
“We believe that it’s almost certain that 2021 will end with a 5-handle on the [consumer price index], and it’s going higher in the next couple of readings, thanks primarily to the price of energy,” Gundlach said on CNBC’s “Halftime Report.” “And we don’t think inflation is going below 4% anytime in 2022.”
His comments come with the CPI, which measures a broad basket of consumer goods prices, increasing at a 5.4% annual pace when including food and energy costs, the fastest in 30 years. The Federal Reserve, meanwhile, which measures personal consumption expenditures excluding food and energy, predicts a 3.6% year over year pace, well ahead of the central bank’s 2% target.
Fed officials, however, insist that current price increases are transitory and driven by supply-chain shocks, extraordinary demand for goods over services, and a labor shortage, all as a result of the Covid-19 pandemic.