WHEN: Today, Thursday, September 17th
WHERE: CNBC's "Fast Money Halftime Report"
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with DoubleLine Capital CEO Jeffrey Gundlach on CNBC's "Fast Money Halftime Report" (M-F, 12PM-1PM ET) today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000421707, http://video.cnbc.com/gallery/?video=3000421930 and http://video.cnbc.com/gallery/?video=3000421932.
All references must be sourced to CNBC.
GUNDLACH ON FED SHOULDN'T RAISE RATES
THE FED SHOULD NOT RAISE INTEREST RATES, AND THE BOND MARKET HAS BEEN SAYING THAT FOR A LONG TIME. IF YOU LOOK AT THE PRICING BASED UPON THE TERM STRUCTURE OF INTEREST RATES, THE SHORT AND THE YIELD CURVE. PROBABILITY OF THE FED RAISING INTEREST RATES IS NOW SET AT 30%, WHICH PUTS IT AT A PRETTY HEAVY UNDERDOG, WHICH MEANS THAT PEOPLE VOTING WITH THEIR WALLETS AND WITH THEIR PORTFOLIO ASSETS ARE SAYING THAT THEY DON'T BELIEVE THE FED IS GOING TO RAISE INTEREST RATES, WHICH MEANS THAT THE FED WOULD SURPRISE THE MARKET IN A WAY THAT HASN'T HAPPENED IN A VERY LONG TIME.
GUNDLACH ON A GUARANTEE
I DON'T THINK THAT THE FED IS GOING TO GIVE US ANY KIND OF A BERNANKE GUARANTEE LIKE HE DID BACK IN WHAT WAS IT, 2011 OR SO WHEN HE SAID RATES WOULD BE LOW FOR – I THINK IT WAS THREE YEARS WHEN HE DID IT BACK THEN. WE WOULDN'T NEED A THREE-YEAR GUARANTEE TO MAKE PEOPLE HAPPY. BUT THE FED HAS DONE A LOT OF WORK TRYING TO GET OUT OF THESE GUARANTEES AND TEMPORARILY BASED FORECASTS WHERE THE FED FUNDS RATE IS GOING TO BE, AND I JUST DON'T THINK ITS PRUDENT FOR THEM. AND, THEREFORE, I DON'T THINK THEY WILL JUST THROW ALL OF THAT WORK AWAY.
GUNDLACH ON INTEREST RATE ENVIRONMENT
IF THE FED RAISES RATES 25 BASIS POINTS, MAYBE IT IS SORT OF THE LAST PIECE TO FALL INTO PLACE AND SAY, YOU KNOW WHAT, WE ARE ACTUALLY IN A RISING INTEREST RATE ENVIRONMENT. AND YOU KNOW, THAT'S KIND OF A BIG DEAL, I THINK. SO IT'S KIND OF SYMBOLIC THAT IF THEY RAISE INTEREST RATES IT'S THE START OF SOMETHING. BUT BEYOND THAT, I DON'T BELIEVE THAT WHAT THE CONSENSUS FEELS THAT THE FED WILL RAISE RATES 25 BASIS POINTS, AND SUDDENLY THAT WOULD MAKE EVERYBODY FEEL GOOD.
GUNDLACH ON FED NOT RAISING RATES
IF THE FED DOESN'T RAISE INTEREST RATES, YOU'LL SEE THAT POWERFUL RALLY. YOU'LL HEAD UP TO THAT BREAKDOWN POINT, AND THEN PEOPLE WILL LOOK AROUND AND SAY WE'RE STILL IN THIS WORLD OF UNCERTAINTY, WE'RE TALKING ABOUT THE FED AGAIN. IT'S GOING TO BE GROUNDHOG DAY ALL OVER AGAIN. AND I WOULDNT BE SURPRISD AT ALL IF THAT RALLY PETERED OUT AFTER A BIG KIND OF PAVLOVIAN RESPONSE.
GUNDLACH ON THE DOLLAR
MARKETS ARE DISCOUNTING MECHANISMS AND VERY OFTEN THE DOLLAR RALLIES A LOT GOING INTO A FED HIKE. BUT THE FED – THE DOLLAR HASNT RALLIED SINCE MARCH. IT RALLIED LIKE CRAZY FROM JUNE TO MARCH. AND IT'S BEEN BROADLY SIDEWAYS SINCE THEN. I JUST THINK THAT IF THE FED RAISES INTEREST RATES, THE DOLLAR WILL PROBABLY GET STRONGER AS IT'S BEEN IN A TRADING RANGE FOR QUITE A WHILE. AND PARTICULARLY IF PEOPLE START TALKING ABOUT YET ANOTHER FED INCREASE SHOULD SOME GOOD DATA COME OUT. AND A STRONG DOLLAR JUST ISN'T A GOOD THING FOR THE UNITED STATES ECONOMY IN THE CONTEXT OF RELATIVELY SLUGGISH OVERALL GLOBAL GROWTH.
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