Billionaire 'bond King' Jeffrey Gundlach says the Fed will likely push back on the market's narrative that it will soon cut interest rates

• Billionaire bond investor Jeffrey Gundlach sees the Fed dashing hopes that it could cut rates this year.
• "I suspect Fed messaging ... will push back against the pivot narrative," he tweeted Tuesday evening.

Billionaire bond investor Jeffrey Gundlach said the Federal Reserve will likely tamp down on the idea in financial markets that the central bank will start cutting interest rates this year.

Expectations that policymakers will soon begin reducing interest rates fueled a January rally in equity and bond prices. The yield on the 2-year Treasury note, most sensitive to Fed policy, has been moving lower since November as prices rise. The yield was at 4.18% on Wednesday.

"I suspect Fed messaging will push back against the pivot narrative and thereby current bond market pricing. Should be interesting," the chief investment officer at DoubleLine Capital tweeted on Tuesday to his more than 274,000 Twitter followers.

The Federal Open Market Committee on Wednesday is expected to deliver its eighth straight rate increase that will put the fed funds rate at 4.5%-4.75% range. Policy makers are also expected to push up the key rate further, to 5.1%.

Fed funds futures pricing suggests investors expect the Fed to start cutting rates mid-year – countering Fed messaging that it's planning to stay aggressive in its fight to cool inflation to its 2% target.

The bond market is signaling that a recession is on the horizon, with the spread between the yield on the 2- and 10-year Treasury notes at its widest in about 40 years, research firm DataTrek said this week.