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Neel Kashkari, president and chief executive officer of the Federal Reserve Bank of Minneapolis.
“I think there is no chance that she wants to be chairwoman, nor do I think the president wants her to be,” said the manager of $109 billion.
Gundlach said that Trump needs someone who will keep rates low in order to keep his populist reputation and help his base voters and that’s why he’ll pick Kashkari.
“A stronger dollar is not good for achieving that agenda,” he said.
The current betting favorite on Wall Street for Fed chief is one-time Fed governor Kevin Warsh, but Gundlach says he doesn’t believe it’s going to be him. He also said there’s no way the president’s chief economic advisor Gary Cohn gets the job because of his close connections to Goldman Sachs, where he was the No. 2 executive. Last month, Trump interviewed them both for the job and current Fed governor Jerome Powell.
“I think I’m the only guy on God’s green earth that believes it will be Neel Kashkari,” said Gundlach.
The money manager believes next year will bring a tough time for “risk markets” like stocks as central banks around the world start to see the error of their ways in keeping rates so artificially low.
“I think we’ve been in an artificially inflated market,” he told interviewer Bethany McLean, contributing editor of Vanity Fair. ” We’re looking at a much tougher environment as we move into 2018.”
Surprisingly Gundlach doesn’t really like bonds either.
But, he said, “I’m stuck with it.”