'Bond King' Jeff Gundlach urges the Fed to immediately raise interest rates to 3% — and Bill Ackman calls for rapid-fire hikes of 100 basis points

• Jeff Gundlach and Bill Ackman called for the Fed to hike rates by more than the 75 basis points expected.
• Gundlach supports a jump of 200 basis points, while Ackman wants a rise of as much as 100 basis points.

Billionaire investors Jeff Gundlach and Bill Ackman urged the Federal Reserve to curb spiraling inflation with an interest-rate hike beyond the 75 basis points expected at its Wednesday meeting.

A rate rise that size would be the US central bank's biggest at a single meeting in more than three decades. But Gundlach signaled he wants an increase of at least 200 basis points from the current level of 0.75% to 1%.

"The Federal Reserve should raise the Fed Funds rate to 3% tomorrow, in my opinion," Gundlach tweeted on Tuesday.

Gundlach, the CEO of DoubleLine Funds, has repeatedly accused the Fed of sending prices skyward.

"Excessive stimulus caused inflation," the so-called "Bond King" tweeted earlier this month. "An intelligent twelve year old was able to predict it."

Soaring prices for food, energy, and housing are threatening to weigh on consumer spending and corporate profits, and fueling fears that a flurry of rate hikes will end the easy-money era.

Investors have reacted by sending the S&P 500 and Nasdaq indices down 22% and 32% respectively this year, and more than halving the price of risky assets such as bitcoin.

Meanwhile, Pershing Square boss Ackman said the sooner policymakers can reach the interest rate level they want, the sooner markets can recover from the pressures.

"Market confidence can be restored if the Fed takes aggressive action with 75bps tomorrow and in July," Ackman tweeted Tuesday. "And yes, 100bps tomorrow, in July and thereafter would be better."

Equity and credit investors are doubtful the Fed can rein inflation, Ackman warned. He called on the central bank to keep raising interest rates and withdrawing monetary support until it slows price increases, restoring the market's confidence in its abilities.

"Hopefully 5%-6% gets it done if the Fed gets there quickly," he tweeted.

Ackman said in May that inflation would only fall if the Fed pursued multiple rate hikes, or stock prices crumbled.

"There is no prospect for a material reduction in inflation unless the Fed aggressively raises rates, or the stock market crashes, catalyzing an economic collapse and demand destruction," he said at the time.

In May, the US Consumer Price Index (CPI) surged to a 41-year high of 8.6%, higher than expected. Gundlach predicted in March the inflation benchmark would reach at least 9% before peaking.

He also warned crude oil prices could surpass $200 a barrel, up from around $120 today. Moreover, he said in April that the US economy is headed for a recession next year, as soaring prices and shortages continue to sap growth.

Other market experts have voiced their support for historic rate hikes. Jeremy Siegel, a finance professor at the Wharton School, told CNBC that a 100-basis-point increase on Wednesday would signal the Fed is committed to "taking the medicine to stop this inflation," and would cut the risk of a recession next year.

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