Jeffrey Gundlach, co-founder of $64 billion investment firm DoubleLine Capital, said the U.S. economy may grow at a slower rate than economists expect this year, as falling oil prices hurt investment and hiring in the energy industry.
While cheaper oil fueled growth in the final months of 2014, the decline has a “sinister” side that will ripple through the economy and prompt downward revisions to forecasts by the middle of the year, Gundlach said today in a webcast. Stock markets may not continue their rally and yields on 10-year Treasuries may go lower before rising again, he said.
Gundlach joins Bill Gross, Pacific Investment Management Co.’s co-founder and former chief investment officer, in cautioning that falling oil prices aren’t just positive for the U.S. Gross said this month that the Federal Reserve’s ability to raise interest rates is limited by the drop in oil, and that prices for many assets may decline this year.
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