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Bond guru Gundlach thinks lower CPI would 'be a cold bucket of water for the Fed tightening dreams'

  • DoubleLine Capital CEO Jeffrey Gundlach believes a lower CPI would squash Fed's dreams of raising rates.
  • The "Bond King" thinks a flattery Treasury yield curve plus oil in the $30s per barrel would be concerning.
Jeffrey Gundlach speaking at the 22nd Annual Sohn Investment Conference on May 8, 2017.
Adam Jeffery | CNBC
Jeffrey Gundlach speaking at the 22nd Annual Sohn Investment Conference on May 8, 2017.

CEO of DoubleLine Capital Jeffrey Gundlach said a lower U.S. consumer price index in the next couple of months would be "a cold bucket of water for the Fed's tightening dreams."

The U.S. Treasury yield curve flattening could become a concern for economic growth when two-year and three-year Treasury note yields are about the same, and the price per barrel of WTI crude oil falls into the $30s, Gundlach said.

The slope of the yield curve has been flattening, with short-term rates rising faster than longer-bond yields. This typically happens when monetary policy is tightened.

"There's no hard data that you could point to that signals recession," Gundlach said in a telephone interview.

—Reuters with CNBC.com